The National Insurance Commission (NAICOM) has pledged to develop a framework that would ensure funds raised from the ongoing recapitalisation is judiciously utilized so that shareholders can have value for their money.
The Director, Policy and Regulation Directorate, NAICOM, Pius Agboola, who said this in Lagos, noted that the need for escrow accounts with Central Bank of Nigeria (CBN) while the funds are being raised cannot be over-emphasized, stressing that prospective investors’ money must be protected against any future contingencies.
The insurance industry regulators also maintained that funds raised from investors in the recapitalisation would be refunded, if the companies failed to recapitalised. It stressed that it would ensure thorough oversight on how successful companies invest the funds raised in the exercise.
It noted that all funds raised in the recapitalisation would be paid into an escrow account domiciled in the CBN, stressing that funds from companies that failed to recapitalised would be returned to investors from who the companies sourced the funds.
According to NAICOM the funds realised from the recapitalisation is expected to help stimulate the accumulation of long-term funds for infrastructural financing; job creation and an improved Return on Investment (RoI).
The regulator noted that having successfully negotiate the hurdles presented by the recapitalisation exercise, the industry would witness the emergence of a vibrant, viable and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to Gross Domestic Product (GDP).