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Chuks Udo Okonta
Owing to the suspension of the insurance industry recapitalisation, insurance companies have adopted different safety measures for the funds raised in the exercise.
investigations by Inspenonline revealed that while some companies, have fixed their raised fund to enable the funds yield interest, some have deployed the fund to their existing funds and others have theirs in an escrow account.
An operator told this medium that his firm had fixed the fund raised and that the fund will be moved into the firm’s asset to strengthen its operations. He noted that as a wise Chief Executive Officer he would not put his funds in an escrow account that yields little or nothing.
Another operator said the funds are deployed according to how they are sourced, adding that companies that raised funds through sales of shares have to transfer their funds to an escrow account in line with the law.
In the suspended recapitalisation, insurance companies raised funds through sources such as, share private placements, sales of subsidiaries, sales of properties amongst others.
The National Insurance Commission (NAICOM) had on December 30, 2020, announced the suspension of the recapitalisation, stating that it had to complied with court order which halted the exercise.
The spokesperson of NAICOM, Rasaaq Salami, in a telephone conversation with this medium said:
“You are aware that the issue is in court and there is an interim order of the Court. NAICOM been a responsible and law abiding organisation will respect the order of the court.”
Shareholders who shared their opinions on the suspension of insurance industry’s recapitalisation, had different stand points. While a group believed that the suspension was a mark that NAICOM respects the law, others said it is not yet uhuru for operators as suspension does not amounts to cancellation.
Managing Director Lancelot Ventures Limited, Adebayo Adeleke, who is also a prominent member of Independent Shareholders Association of Nigeria (ISAN), charged insurance operators not to relent as suspension is not cancellation, stressing that the court case could turn in favour of NAICOM.
He urged operators to continue with their fund drive, adding that they really need funds to underwrite high tickets risks.
Financial analyst and Shareholder, Nona Awo, said the suspension is in order, stressing that with the COVID-19 Pandemic and #EndSARS, it was not the best time to undertake an effective recapitalisation.
He urged NAICOM, Insurance operators and other stakeholders to work together and be on the same page on how to determine the type of capital the industry needs.
The spokesperson of NAICOM, Rasaaq Salami, in a telephone conversation with this medium said:
“You are aware that the issue is in court and there is an interim order of the Court. NAICOM being a responsible and law abiding organisation will respect the order of the court.”
