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Chuks Udo Okonta
The National Insurance Commission (NAICOM) has said the existing 57 insurance and two reinsurance firms must have N323 billion recapitalisation fund, which is 60 and 50 per cent to be raised this year in the escrow account opened for the exercise comes December 31, 2020.
The spokesman for NAICOM, Rasaaq Salami, in a telephone conversation, told Inspenonline that the fund must be domiciled in the escrow account to enable the commission carry out proper verification from January 2021.
NAICOM had in a circular signed by its Director, Policy & Regulation, Pius Agboola, entitled: ‘Segmentation of Minimum Paid-Up Share Capital Requirement for Insurance and Reinsurance Companies in Nigeria’. The circular was numbered; NAICOM/DPR/CIR/25-04/2020, dated June 3, 2020 and sent to all insurance and reinsurance companies, announced the segmentation of the ongoing recapitalisation urging insurers and reinsurers to meet 50 and 60 per cent respectively of their minimum paid-up share capital by December 31, 2020 and complete the process by September 30, 2021.
The insurance industry regulator noted that the incidence of COVID-19 pandemic has made it difficult to proceed with the December 31, 2020 recapitalisation deadline, hence, a review of the recapitalisation deadline therefore became imperative in order to mitigate likely negative consequences of the pandemic on the exercise.
With the aforesaid, NAICOM noted that it then extended and segment the recapitalisation process into two phases which allowed 50 per cent of the minimum paid-up capital for insurance and 60 per cent for reinsurance to be met by December 31, 2020, while the operators are to fully comply with the approved minimum paid-up not later than September 30, 2021.
NAICOM maintained that insurance companies that failed to satisfy the required minimum paid-up capital by the end of December 31, 2020 May be restricted on the scope of business they will transact.
The Commission charged insurance and reinsurance firms to ensure they fully comply with the approved minimum paid-up capital by September 30, 2021.