NAICOM issues another circular on TBMSC
The National Insurance Commission (NAICOM) has issued another circular advising insurance companies to continue to operate on subsisting regulatory framework prior to the issuance of the circular on Tier-Based Minimum Solvency Capital (TBMSC).
This was contain in a circular tagged, “Update on the Implementation of the Tier-Based Minimum Solvency Capital Policy for insurance Companies in Nigeria,” issued on Thursday (October 18, 2018) to all insurance companies and signed by Director, Authorization and Policy, NAICOM, Leonard Akah.
NAICOM stated that “in compliance with the extant rules and the injunction issued by the Federal High Court regarding the TBMSC framework which was to take effect from October 1, 2018, it wishes to clarify that the status quo will be maintained and that insurers are to continue to operate on subsisting regulatory framework prior to the circular.”
It maintained that appropriate regulatory directive would be advised upon conclusion of the suit.
The circular reads in detail “In compliance with the extant rules and the injunction issued by the Federal High Court regarding the TBMSC framework which was to take effect from October 1, 2018, it wishes to clarify that the status quo will be maintained and that insurers are to continue to operate on subsisting regulatory framework prior to the circular.”
”Appropriate regulatory directive would be advised upon conclusion of the suit.
TBMSC is a guideline issued by NAICOM to drive the industry’s Risk Based Supervision and Good Corporate Governance model introduced in 2013.
In reaction against NAICOM’s TBMSC framework, shareholders under the umbrella of Independent Shareholders Association of Nigeria (ISAN) went to court to challenge the implementation of the policy, asking the court to suspend the process and their prayer was granted and the policy was suspended by the court.
Meanwhile, a Federal High Court sitting in Lagos had on Monday (October 8) adjourned the case in question to October 22 for hearing on application filed by Sir Nnamdi Nwosu and Seven others shareholders Vs the National Insurance commission (NAICOM) on the case with ref no 1483 of 2018 FHC/L/CS/ 1483/18.
Justice Muslim Hassan of the Federal High Court had on September 13th gave a directive that NAICOM should put on hold its proposed minimum solvency capital policy for insurers in the country until after the expiration of 30 days pre action notice shareholders of insurance companies served the commission on the 6th of September, 2018.
NAICOM had on August 2018 announced that the insurance companies Tier-based minimum solvency capital commencement date to October 1, as against initial date of January 1, 2019 it earlier announced in the month of July.
It should be recalled that NAICOM had in July this year, released a guideline on TBMSC which classified the business of insurance into three tiers.
