As the deadline given to insurance companies by the National Insurance Commission (NAICOM) to submit their recapitalisation plans expired on August 20, 2019, many insurance companies have complied with the directive.
Some of the companies that have submitted their recapitalication 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.
NAICOM, having received plans from many insurance companies will proceed with the review of the plans.
Although, no specific number of insurance companies that have so far submitted their plans, but many firms have complied even as 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.
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.
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.