The National Insurance Commission (NAICOM) has extended the recapitalisation deadline by six months. Operators now have from June next year to December 31 to recapitalise.
The extension is coming six months to the end of the ultimatum given by NAICOM to the existing 58 insurance companies to recapitalise failing which they will forfeit their licenses.
The extended deadline raised the minimum paid-up share capital of a Life insurance company from N2 billion to N8 billion; Non-Life insurance from N3 billion to N10 billion and Composite insurance from N5 billion to N18 billion. Re-insurance companies were directed to raise their capital base from N10 billion to N20 billion.
It was learnt that after intense and series of meetings at the Commission and Ministry of Finance, a circular dated December 30, 2019 to all Insurance Companies and titled: “Re: Minimum Paid Up Share Capital Policy for Insurance and Reinsurance Companies in Nigeria was released to the effect of the extension.
The circular read: “This Circular is in furtherance to our earlier Circulars referenced NAICOM/DPR/CIR/25/2019 dated May 20, 2019 and NAICOM/DPR/CIR/25 — 01/2019 dated July 23, 2019 on the above subject matter.
“The Commission has reviewed the recapitalisation plans submitted by operators and various levels of compliance observed. Similarly, it has noted the inputs from the various engagements with relevant stakeholders. The Commission therefore hereby extends the recapitalisation deadline to December 31, 2020.”
“On Escrow Accounts with the Central Bank of Nigeria, the apex bank has obliged the Commission with the Recapitalisation Escrow Account (T24) for the deposit of fresh funds raised for recapitalisation.
“On Palliative Measures, as part of the measures to ease the recapitalisation exercise, some of the relevant Agencies have set up Help Desk to fast track processing of application for ‘No Objection’ and for approvals. Engagements with these Agencies on other palliatives are ongoing”, the commission stated.
Recall that insurance operators and other stakeholders had earlier sought for an extension of the recapitalization deadline and the commission was reviewing whether to extend the deadline or not.
The Deputy Director and spokesman for the Commission Rasaak Salami said the extension should be translated to mean that NAICOM “is having a rethink about the recapitalisation process.
Salami stated that the industry asks the commission for an extension of the June 2020 date but has promised to get back to the operators.
He pointed out that it is not all operators are asking for the extension as some have already gone far in the recapitalisation bid.
The NAICOM spokesman said that just as some are complaining, others are completing their processes.
According to him, many companies have completed their recapitalisation.
