Recapitalization: NAICOM extends deadline to December 2020

The National Insurance Commission (NAICOM) has extended the deadline of the ongoing recapialisation exercise in insurance industry to December 31, 2020.

It should be recalled that NAICOM had earlier given June 30, 2020 as recapitalisation deadline

The new development contained in NAICOM’s circular signed by its Director, Policy and Regulation Directorate, Pius Agboola, titled: Re: Minimum Paid Up share Capital Policy for Insurance and Reinsurance Companies in Nigeria; dated December 30, 2019 and sent to all insurance and reinsurance companies.

The insurance sector regulator noted that it has reviewed the recapitalisation plans submitted by operators and various levels of compliance observed, and noted the inputs from the various engagements with relevant stakeholders, therefore, extends the recapitalisation deadline to December 31, 2020.

NAICOM also stated that the Central Bank of Nigeria (CBN) has obliged it with the recapitalisation escrow accounts (T24) for the deposit of fresh funds raised for the recapitalisation with details: T24 Account Name: Recapitalisation Escrow – NAICOM and T24 Account No. 0230164061014.

As part of palliative measures to ease the recapitalisation, some of the relevant agencies have set up help desk to fast track processing of applications for ‘No Objection’ and for approvals, adding  that engagements with these agencies on other palliatives are on going.

NAICOM had on May 21 this year raised the minimum paid-up share capital of a Life insurance company from N2 billion to N8 billion; Non-Life insurance from N3 billion to N10 billion and Composite insurance from N5 billion to N18 billion. Reinnsurance companies were directed to raise their capital base from N10 billion to N20 billion.

Meanwhile at the last Insurers Committee Meeting held in Lagos earlier in the month, insurance operators proposed to NAICOM for deadline extension while the regulator promised to review their proposal before deciding on whether to extend the deadline or not.

Chairman, Brand and Publicity Sub-committee of the Insurers Committee, Mrs. Ebelechukwu Nwachukwu, who is also the managing director/CEO, NSIA Insurance Limited., said “at the meeting, operators proposed to NAICOM to extend the recapitalisation deadline to give operators more time to raise the needed capital and the commission has asked us to articulate our request and forward them to it for deliberation.”