The National Insurance Commission (NAICOM) has announced the recapitalisation of insurance and reinsurance companies in Nigeria.
The Head, Commissioners Directorate of NAICOM, Salami Rasaaq, said in Abuja on Monday, 20 May 2019, that the minimum capital base for life insurance companies was increased from 6.7 million dollars (N2 billion) to 25 million dollars (N8 billion), while General Insurance was increased from 9.8 million dollars (N3 billion) to 32.7 million dollars (N10 billion).
He said Composite insurance was increased from 16.3 million dollars (N5 billion) to 59 million dollars (N18 billion), while reinsurance capital base was increased to 65.6 million dollars (N20 billion) from 32.7 million dollars (N10 billion) capital base.
“The circular shall apply to all insurance and reinsurance companies other than takaful operators and micro insurance companies.
“The new minimum paid-up share capital requirement shall take effect from the commencement date of the circular for new applications which is 20 May 2019.
“Existing insurance and reinsurance companies shall be required to fully comply not later than 30 June 2020.
“The provision in respect of requirement of statutory deposit as stipulated in part three, Section 10 of the Insurance Act 2003 shall apply on the effective date of commencement.
“And all insurance and reinsurance companies are required to ensure strict compliance with the circular,’’ Rasaaq said.
According to Rassaq, the insurance industry witnessed its last recapitalisation in 2005/2007.
He said in spite of the astronomical increase in value of insured assets, consequent exposure to higher level of insured liabilities and operating cost of insurers, the same capital continued to rule in the insurance industry.
He said the commission exercised the power conferred on it by law to review the minimum capital base for the companies in the country.