The Nigerian Insurers Association (NIA) has commended the National Insurance Commission (NAICOM) for its recent extension of deadline for recapitalisation of insurance and reinsurance companies in the country, describing it as a step in the right direction.
Director -General of the association Mrs. Yetunde Ilori, while commenting on recent developments on the industry recapitalisation, stated that the commission had taken a bold step in the right direction by acceding to the request of companies for extension of deadline for the exercise.
“By the extension, 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.
She said: “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.
“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 recapitalisation threshold set for our various businesses. That way, we will encourage the commission to churn out more market- friendly policies,”
She said the onus is on member companies 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 recapitalisation option they have to take, the new timeline will give them ample opportunity to do so. The NIA wishes members success in their recapitalisation plans and pray for a hitch-free exercise”.
Continuing, the DG stated that the market expects cheerier news from NAICOM by way of palliatives and incentives, especially those that are within the commission’s control.
She stated that 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 recapitalisation and increase shareholder value.
The commission in May last year, 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.