NAICOM, Operators, Others Look Beyond Suspended Recapitalization Plan

L-R: Olorundare Sunday Thomas, Commissioner for Insurance/CEO, National Insurance Commission; Ganiyu Musa, Chairman, Nigerian Insurers Association, and Eddie Efekoha, Group Managing Director/CEO, Consolidated Hallmark Insurance Plc, during the Nigeria Insurers’ Committee meeting in Lagos on Thursday.

With the unfolding scenarios in the Nigerian insurance industry, one need not to be told that the suspended recapitalization exercise which was championed by the industry’s primary regulator, the National Insurance Commission (NAICOM) from 2019 but suspended 10 days to the December 31, 2020 deadline for the first phase of the plan where insurance companies were expected to raise 50 per cent of the new capital may no longer be revisited.

This is because the industry’s stakeholders including the regulator, operators, various shareholders groups amongst others may have agreed on a level playing ground as to what should constitute the capital for operators in the sector.

It could be recalled that in December, 2020, the House of Representatives had ordered the discontinuation of the recapitalisation exercise and had written to NAICOM to that effect.

The House stated that it was worried about the impact of the latest economic challenges such as the COVID-19 Pandemic and #EndSARS protest, the House of Representatives passed a resolution demanding that the NAICOM suspend its planned December 31, 2020, mandatory deadline for the first phase of 50 per cent of the new paid-up share capital for insurance and reinsurance companies

“The suspension is expected to last for six months from January – June 2021 and is necessary to give the insurance operators soft landing as well as cushion the effects of Covid-19 and other unforeseen circumstances they might have suffered,” the law makers had stated.

L-R: Yetunde Ilori, Director General/CEO, NIA; Folashade Joseph, Managing Direct/​CEO, Nigerian Agricultural Insurance Corporation, and Ganiyu Musa, Chairman, Nigerian Insurers Association, during the Nigeria Insurers’ Committee meeting in Lagos

Meanwhile, two shareholder groups had also contested against NAICOM on the recapitalisation exercise and had gone to court to challenge the process.

A Federal High Court sitting in Lagos had temporarily stopped NAICOM from taking any further steps in effecting its recapitalisation deadline against insurance and reinsurance companies.

NAICOM, In it’s renewed effort to ensure the industry is adequately capitalized, went back to the drawing board to know why the industry’s recapitalization exercise was opposed by some stakeholders.

In doing this, the regulator had organized various meetings to listen to various interest groups in order to have their buy-in.

In one of the meetings organized by NAICOM in Lagos to meet with the various shareholders groups, NAICOM was accused of not always consulting with the relevant industry stakeholders or carry them along before taking decisions.

Speaking at the stakeholders meeting, the President, Providence Shareholders Associates of Nigeria, Mr. Boniface Ekezie had suggested that NAICOM should adopt a democratic leadership style anchored on regular engagement and consultation with the people.

As a result of series of meetings and consultations by NAICOM with the operators, the shareholders and other stakeholders, they said there is likelihood that the regulator had come to terms on the next line of action to be taken in respect of the statutory capital requirements for insurance operators.

While responding to Questions at the 6th Business Today Communications conference in Lagos recently, the Chairmen, Nigerian Insurers Association (NIA), Mr Ganiyu Musa who is also the Group Managing Director of Cornerstone Insurance gave assurance that NIA is working assiduously with NAICOM to arrive at what constitutes a statutory capital for the operators.

He said the industry will soon made its decision on the matter known, even as he said they are also waiting for the enactment of the Insurance Industry Consolidated Bill presently before the Senate.

Commissioner for Insurance and the Chief Executive Officer, the National Insurance Commission (NAICOM), Olorundare Sunday Thomas, while addressing Managing Directors of insurance companies and management of Nigerian Insurers Association (NIA) at the Insurers’ Committee meeting in Lagos yesterday informed them of the Commission’s plan to unveil Risk-Based Capital (RBC) roadmap that will provide direction for the insurance industry new capital regime.

Thomas told the gathering that the commission would by end of April make public its decision on what should constitute the capital for operators in the sector.

He also commended operators that have embraced the NAICOM Portal, whilst imploring those yet to fully comply with the directive to do so.

L-R: Salami ‘Rasaaq, Head Corporate Communications and Market Development, National Insurance Commission (NAICOM); Ebelechukwu Nwachukwu, Managing Director/CEO, NSIA Insurance Company Ltd; Akinjide Orimolade, Managing Director/CEO, Stanbic IBTC Insurance, and Segun Omosehin, Managing Director, Old Mutual Nigeria Life Assurance Company Ltd, during a media briefing after the Nigeria Insurers’ Committee meeting in Lagos on Thursday.

Thomas noted that there has been a tremendous progress in the upload of data by operators, stressing that by the end of April the commission would state its position on those not fully complying with the directive to send their documents via the portal.

He implored insurers to do more on settlement of claims, charging them to enhance and simplify their policy documents to enable the public understand what they offer.

The National Insurance Commission (NAICOM) said it was expecting total compliance from operators in  uploading of their data on the commission’s portal.

Briefing the media after the meeting, the Chairman, Sub-Committee on Publicity and Communications, Insurers Committee,  Mrs Ebelechukwu Nwachukwu,  noted that the committee discussed and agreed on several initiatives that would help propel Insurance sector forward.

Nwachukwu who is also the Managing Director, NSIA Insurance Limited, said assured the Committees resolve to partner with the media to ensure success of its programmes.

Additional Information from Inspenonline