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Chuks Udo Okonta
The insurance industry recapitalisation exercise will soon be reactivated as a revised risk based guideline is in the works and almost set for release, Inspenonline can report.
Our investigation revealed that to achieve this feat, the industry regulator, National Insurance Commission (NAICOM) and operators are engaging to have out of court settlement with some parties that went to court to challenged the suspended recapitalisation.
Our source informed that the Nigerian Insurers Association (NIA) in collaboration with NAICOM have reached at what should be minimum capital for the industry and this has been imputed in the Consolidated Insurance Bill 2020 that is presently with the National Assembly.
The source said with the definition of what should constitute insurance minimum capital in the Finance Act and spelt in the Consolidated Insurance Bill 2020, NAICOM would soon issue a risk based revised guideline that would see to the reactivation and conclusion of the suspended recapitalisation.
Chairman of NIA, Ganiyu Musa, on the engagement, noted that the association is engaging the National Insurance Commission with a view to determining the next steps, having resolved a major issue with regards to the definition of the components of minimum capital, in Finance Act 2021 which has been signed into law.
He noted that Consolidated Insurance Bill 2020 is still receiving legislative attention in the National Assembly and the Association is on top of developments on it. “We are optimistic that the Bill will be passed into law before long,” he posited.
Prior to introduction of the suspended industry recapitalisation, the minimum capital base of life insurers was N2 billion non life, N3 billion, composite, N5 billion and reinsurers, N10 billion.
The regulator in the suspended exercise, raised the minimum capital to N8 billion for life, N10 billion for non life, N18 billion for composite and N20 billion for reinsurers.
The anticipated revised guideline which would be risk based, will tier the businesses, though with a minimum capital, which is not too far from similar tier based policy adopted by the regulator in the past but was halted by letigations instituted by some parties.
Risk based recapitalisation will enable operators operate according to their capital strength.
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