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Chuks Udo Okonta
The National Insurance Commission (NAICOM) has forewarned insurance companies not to consider foreign expansion post recapitalisation, as funds raised in the ongoing recapitalisation will be deployed locally to underwrite big businesses, pay claims and support the economy.
The Acting Commissioner for Insurance, Sunday Thomas, who said this at a forum in Lagos, noted that the recapitalisation will not lead to more branches in foreign countries that are as big as a local government in Nigeria.
He posited that the commission will issue guidance note on recapitalisation by the end of March 2020, adding that the commission has observed that some companies are still pursuing businesses that are putting holes in pockets.
He maintained that recapitalisation is really necessary because when the industry is stabilised, it would help stabilised other sectors.
On roles of the commission in the ongoing recapitalisation, he said NAICOM as a regulator would ensure transparency and certainty of the process; orderliness of the recapitalisation process; ensure an enabling environment – palliative and level playing field – fair to all.
Other roles according to him include; ensuring that recapitased companies are liquid; safety of funds raised – Payment into Escrow Account; orderly exit of un-recapitalised companies and efficient resolution of pre and post-recapitalization governance/conflicts.
Thomas maintained that the commission is committed to sustainable growth in order to enhance the stability of the Insurance Industry in Nigeria.
“Commission had in 2019 initiated the process to recapitalise the insurance industry in order to upscale its financial standing to meet up with current economic realities and avoid imminent systemic collapse and solvency crisis in the insurance sector,” he added.
Thomas maintained that the recapitalisation will ensure that the industry becomes more robust in its technical competence and financial base, build confidence, trust and enhance market value. He added that the exercise is further aimed at repositioning the sector for self-actualization in terms of growth and development.