Tope Smart, NIA Chairman
PRESS RELEASE--The Nigerian Insurers Association (NIA) has commended the National Insurance Commission (NAICOM) for its recent circular on extension of deadline for recapitalization of Insurance and Reinsurance Companies in Nigeria, describing it as a step in the right direction.
Director General of the Association Mrs. Yetunde Ilori, while commenting on recent developments on the insurance industry recapitalization, stated that the Commission had taken a bold step in the right direction. byacceding to the request of Insurance Companies for extension of deadline for the exercise.
“The Association appreciates the Acting commissioner for Insurance, Mr. Olorundare Sunday Thomas and management of National Insurance Commission for acceding to our request”
“This singular move has no doubt portrayed the Commission as one with a listening ear. It has proven to be responsive to the yearnings and aspirations of the insurance operators and shown that the interest of the market is uppermost in its considerations”. She enthused.
She noted that by the extension insurance companies now have ample time to comply with the directive instead of having to go into the exercise without adequate preparation and diligent execution. This will also be in support of a seamless reinsurance arrangement which is an annual arrangement. it would have been absurd to conclude the recapitalization exercise by mid year as this might have caused a lot of disruptions.
“Now that the Commission has provided the needed impetus for members to go about the exercise, It is my appeal that member companies should give the exercise all the seriousness it deserves. “We need to appreciate the Commission’s gesture by working hard to achieve the recapitalization threshold set for our various businesses. That way, we will encourage the Commission to churn out more market friendly policies” she averred.
“For our members, the onus is on them to take advantage of the new date as some of the initial challenges thrown up by the first date have been addressed with the extension granted. It is our hope that whatever recapitalization option they have to take, the new timeline will give them ample opportunity to do so. The NIA wishes members success intheir recapitalization plans and pray for a hitch free exercise”.
Continuing, the Director General stated that the market expects more cheery news from NAICOM by way of palliatives and incentives especially those that are within the Commission’s control. According to her, the appeal is based on the fact that the cost of the exercise will be too heavy on the companies and this will assist the companies to reduce the cost of recapitalization and increase shareholder value.
It will be recalled that in May last year, the Commission increased the capital levels for Insurance and reinsurance companies operating in the market as follows: Life Insurance business from N2billion to N8billion, General Insurance Business from N3 Billion to N10billion, Composite Insurance Business from N5 billion to N18Billion and Reinsurance companies from N10billion to N20billion with a deadline for the exercise set for June 2020.
With the latest development, Insurance companies now have December 2020 to comply.