Shareholders of insurance firms have urged the National Insurance Commission (NAICOM) to allot more time to insurers to recapitalise as the June 2020 deadline seems not feasible.
Speaking with Daily Sun at the annual general meeting of Niger Insurance Plc held in Lagos recently, the President, Pragmatic Shareholders Association of Nigeria, Bisi Bakare, said it is crucial for NAICOM to extend the deadline to the end of 2020 so that many companies will not go into extinction just as the banking sector witnessed during its recapitalisation process.
“To avoid a repeat of history witnessed in the banking sector where several banks shut down, I am appealing to NAICOM to review the recapitalisation deadline for insurance companies so as to ensure they can have enough time to actually recapitalise and not fail after the process.
“Six months extra should be added to the already set date to enable them prepare well, source for funds and execute effectively their recapitalisation plans so that by 2020, they can be fully capable of underwriting risks,” she said.
Also speaking at an event, the National President, Constance Shareholders, Association of Nigeria, Mr Shehu Mikail, said there is need for an extension of the June 2020 deadline, as it does not seem feasible due to the present economic challenges.
Mikail stated that once the economy improves, the directive could be implemented by the end of 2020.
He further noted that while the initiative is laudable, there could be problems with implementation, as the present time frame and procedure could affect the growth of insurance companies.
“Personally, I think it is good to have the recapitalisation to enable us have stronger insurance companies. But because the economy is not friendly at this period, most of the insurance companies would face this problem, as nobody is ready to invest their money,” he said.
On his part, the National Coordinator, Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, lamented that the time frame stipulated by NAICOM for the recapitalisation exercise is short.
Okezie complained that the regulator did not consider public opinion and complaints of the shareholders before taking the decision.
“For us, it is a fire brigade approach that the regulators are adopting in the market which is not helping the industry. However, it is good enough that the insurance companies have braced up to the challenge and are putting up plans to ensure that the deadline is met,” he said.