AIICO, FBNInsurance, LASACO, NEM, Others Submit Recapitalisation Plans to NAICOM
As the deadline given to insurance companies by the National Insurance Commission (NAICOM) to submit their recapitalization plans expired on August 20, 2019, many insurance companies have complied with the directive.
Our findings show that many insurance companies have met the deadline.
Some of the companies that have submitted their recapitalization plans 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.
Our findings from NAICOM revealed that the Commission having received plans from many insurance companies will proceed with the review of the plans.
Although our source who did not want his name mention did not give the specific number of insurance companies that have so far submitted their plans, but said many insurance companies have complied adding that the purpose of the recapitalisation plan is to figure out how the companies intend to raise new capital in order to meet up with the new share capital requirement, before June 30, 2020.
“There is compliance by the companies and the Commission knows their plans. The next step for us is to review what they have submitted,” he said.
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.
Also, Companies intending to seek funds from the capital markets are required to submit their plan of action on a file-and-use basis while companies that intend to merge or acquire another should submit their proposal after which they must comply with Sections 30 and 31 of the Insurance Act 2003.
The commission shall review and provide responses 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 company on its recapitalisation plan.
The Commission is engaging other regulatory bodies for possible palliatives in addition to those being considered by the Commission.
It should be recalled that NAICOM had directed in a circular dated July 23rd, 2019, 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, 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 recapitalisation are to be sourced with timeline and deliverables.
The Commission according to the recapitalization timetable has till September 17, 2019 to review the submissions, engage the companies and their director’s one-on-one basis.
