Nigeria’s insurance industry regulator, the National Insurance Commission (NAICOM), has given June 30, 2020, as deadline for operating insurance firms to comply with its new minimum paid-up share capital.
The regulator in a released information stipulated an increase in the minimum paid-up share Capital Requirements for Insurance and Re-insurance companies, with the deadline but did not recommend sanctions for default.
The NAICOM, through a circular with No. NAICOM/DPR/CIR/25/2019 signed by the Director, Policy And Regulation Directorate, NAICOM, Mr Pius Agboola, said “In the exercise of the powers conferred on the commission by the enabling laws, the minimum paid up share capital requirement of insurance and reinsurance companies in Nigeria is hereby reviewed.”
The statement stipulates a revised minimum paid-up capital in life, general, composite and Reinsurance from N2bn, N3bn, N5bn and N10bn to N8bn, N10bn, N18bn and N20bn respectively .
The commission stated “In 2015/7, the insurance industry witness it’s last recaptilization and despite the astronomical increase in value of insured assets, consequent exposure to higher level of insured liabilities and operating cost of insurers, same capital continued to rule in the insurance industry.”
According to the statement, the revised minimum paid-up capital shall apply to all insurance and reinsurance except Takaful operators and Micro-insurance companies.
“The new minimum paid-up share capital requirements shall take effect from the commencement date of this circular for new applications while existing insurance and reinsurance companies shall be required to fully comply not later than June 30, 2020.”
The provision in respect of requirement of statutory deposit as stipulated in part III, section 10 of the insurance Act 2003 shall apply on the effective date of commencement of this circular
Oriental News Nigeria reports that NAICOM recently cancelled it’s intending raise in the minimum capital base for life, non-life and composite insurance companies seeking to get licences to underwrite all risks in the country from N2bn, N3bn and N5bn to N6bn, N9bn and N15bn, respectively under its tier-based minimum solvency capital structure.
The cancellation was reportedly as a result of an unacceptable deadline by underwriters and stakeholders announced by the regulator as October 1, 2018, pushing them to take a legal action against the commission.