Joseph Inokotong, Abuja
No less than 10 insurance companies have complied with the recapitalisation directive given by the National Insurance Commission (NAICOM) for the submission of underwriters’ template ahead of the August 20, 2019 deadline set by the regulators
Although the exact number of companies that have hit the deadline could not be ascertained as at the time of this report, a reliable source told Daily Sun that many insurance companies have already submitted their work plan ahead of the deadline.
He stressed that exact numbers of the companies that have complied were immaterial because the essence of the recapitalisation plan is to ascertain how the companies intend to raise the new capital in order to meet up with the new share capital requirement, before June 30, 2020.
Investigation reveals that some of the insurance companies that have met the deadline include: AIICO Insurance Plc, FBN Insurance Limited, LASACO Assurance Plc and NEM Insurance Plc.
Others are AXA Mansard Insurance Plc, Allianz Nigeria Insurance Plc, SUNU Assurance Plc, Cornerstone Insurance Plc, and Mutual Benefit Assurance Plc.
The stage is now set for the Commission to proceed with the review of the submitted plans, having received the documents from the insurance companies.
NAICOM is expected to review and provide guidance on the submitted recapitalisation plans on or before September 17, 2019. The review may require meeting with the board and management of each of the insurance companies on its recapitalisation plan.
The Commission is engaging other regulatory bodies for possible palliatives in addition to those being considered by it.
“There is high compliance by the insurance companies and the Commission knows their plans. The next step for us is to review what they have submitted,” said the source.
The new capital structure for Life, Non-Life and Composite insurance companies, including re-insurance companies will be N8 billion, N10 billion, N18 billion and N20 billion respectively, from N2 billion, N3 billion, N5 billion and N10 billion.
NAICOM had said companies intending to seek funds from the capital markets are required to submit their plan of action on a file-and-use basis while those that intend to merge or acquire another should submit their proposal after which they are to comply with sections 30 and 31 of the Insurance Act 2003.
It is pertinent to note that NAICOM had directed in a circular dated July 23, 2019, and sent to all insurance and reinsurance firms titled: ‘Re: Minimum Paid Up Share Capital Policy for Insurance and Reinsurance Companies’ signed by Pius Agboola, Director, Policy & Regulation Directorate of NAICOM to submit their recapitalisation plans to the Commission on or before August 20, 2019.
The circular stated that the recapitalisation plan should include among others, capital status of the companies as at the last audited financial statements; board resolution on how to comply with the directives, and detailed action plan on how the funds for the project.