NAICOM issues recapitalization guidelines, to start verification September 21, 2020
The National Insurance Commision (NAICOM) has issued guidelines for the ongoing recapitalization exercise in the Nigerian insurance industry slating commencement of capital verification for September 21, 2020.
Director, Policy and Regulations, NAICOM, Pius Agboola, in a circular signed for the Commissioner for Insurance, Sunday Thomas, today, entitled: “Re: Minimum Paid Up Share Capital Policy for Insurance and Reinsurance Companies in Nigeria,” stated that the circular is in furtherance to the commission’s earlier circulars referenced NAICOM/DPR/CIR/25/2019 dated May 20, 2019, July 23, 2019 and December 30,2019 respectively on the subject matter.
According to him, “NAICOM shall commence capital verification on September 21 while communication of capital verification report to respective companies shall begin on November 30 and end January 21, 2021.”
He said further that the minimum paid-up share capital shall be through any or a combination of either and existing paid-up share capital, cash payment for new shares, retained earnings – capitalisation of undistributed profits.
Agboola also stated that payment in kind, such as properties, T-Bills, Shares, Bonds, share premium among others for new shares issued which must be converted to cash not later than three months to the recapitalisation deadline.
According to him, “the above components are to be converted to paid-up share capital in compliance with the recapitalisation exercise and applicable laws and regulations in Nigeria.
“For Private Placement, appropriate clarification have been obtained from the relevant regulatory agency to the effect that insurance and reinsurance companies may offer more than 30 per cent of the existing issued and fully paid shares.
“Submission of recapitalisation progress report shall now be monthly and the report shall be submitted not later than five working days after the end of each month, effective end of August ,” he said.
Agboola stated that timeline and activities for the first phase of the recapitalisation have been scheduled to commence on August 30 for submission of monthly recapitalisation progress report.
He said completion of the submitted reports would be after five working days after the end of each month, noting that all mergers for the purpose of meeting the first phase of November 30, 2020 recapitalisation would commence on September 14 and shall be irreversible except with a written approval of the commission.
According him ”Deadline for compliance with the first phase of the new minimum
paid-up capital by all existing companies remains December 31 and issuance of letters of compliance as at date is February 26, 2021,” he posited.
