L-R: A shareholder; Head Corporate Communication, NAICOM, Rasaaq Salami; Director, Policy & Regulation Directorate, NAICOM, Pius Agboola; head financial standard and Corporate governance, Securities and Exchange Commission (SEC), Sulaiman Alhassan and Nona Awo, a shareholder at the event.
NKECHI NAECHE ESEZOBOR—Shareholders of quoted insurance companies on Tuesday unanimously endorsed the new minimum capital requirement introduced by the National Insurance Commission (NAICOM).
Cross section of shareholders at the event.
The shareholders made their position known at the interactive session held by the commission for shareholders of quoted insurance companies in Nigeria.
Cross section of shareholders at the event.
Shareholders such as, Shotunde Shopeju; Oyegunle Olayitan and Nona Awo, commended NAICOM for recapitalisation in the industry and for organising the event.
They also implored the commission to regularly consult shareholders before initiating programmes that affect their companies. Some of them however, complained that the time given for the exercise is too short.
Mr Adeniyi Adebisi, Coordinator, Independent Shareholders Association, commended NAICOM for their effort in repositioning the industry.
He also urged NAICOM not be hostile and antagonistic in its regulatory approach.
Adebisi also charged the commission to give an ample time frame, dialogue, engage with all stakeholders and fashion out ways of addressing the deteriorating economy.
Mr Shehu Mikali, National President, Constance Shareholders Association, also said the problem with the recapitalisation was not from the insurance firm or shareholders, but from the government.
Mikali said although the recapitalisation process was coming at the right time, he however called for for proper cognisance amongst the regulators, as this was affecting a lot of things which need to be addressed.
“If the government can reason and put the round peg in the round hole, there won’t be any problem.”
Speaking further, head financial standard and Corporate governance, Securities and Exchange Commission (SEC), Sulaiman Alhassan, hailed the effort of the commission in recapitalising the industry.
He also implore shareholders to take advantage of the recapitalisation buy shares of insurance companies now that the share prices are low, stressing that SEC would ensure that the interest of shareholders are protected in the recapitalisation.
With this New Minimum Capital Requirement, a further consolidation of the Nigerian insurance sector is imminent, as some insurers may seek to merge or be acquired by bigger firms, in a bid to comply with the Circular. As insurance and reinsurance companies begin the necessary move towards shoring up their capital base (during the 13-month grace period granted to existing operators to fully comply with the Circular).
Life insurance firms were required to increase their minimum capital requirement from N2 billion to N8 billion, amounting to 400 per cent increase in their capitalisation.
Similarly, General insurance companies are to raise their capital base to N10 billion from N3 billion to continue to exist in insurance industry, even as Reinsurance Firms will now need N20 billion capital base to operate Reinsurance business in the country, unlike N10billion they were operating with, prior to now.
L
