The Nigerian Insurers Association (NIA) has said the National Insurance Commission (NAICOM)’s decision to extend the recapitalisation deadline shows it has interest of the market at heart. Recall that in May 2019, the commission increased the capital levels for insurance and reinsurance companies operating in the market as follows: Life Insurance business from N2 billion to N8bn, General Insurance Business from N3 billion to N10 billion, Composite Insurance Business from N5 billion to N18 billion and Reinsurance companies from N10 billion to N20 billion with a deadline for the exercise set for June 2020. With the extension, insurance companies now have up till December 2020 to comply.
A statement by Davis Iyasere, Controller, Corporate Communications, Human Resources and Administration quoted the director general of the association, Mrs. Yetunde Ilori, to have said the commission took a bold step in the right direction by acceding to the request of insurance companies for extension of deadline for the exercise. She said: “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 recapitalisation exercise by mid-year as this might have caused a lot of disruptions.”
The director general also 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. She said the appeal was based on the fact that the cost of the exercise would be too heavy on the companies and that would assist the companies to reduce the cost of recapitalisation and increase shareholder value.