The Nigerian Insurers Association (NIA) has urged insurers to take advantage of the recapitalisation extension recently announced by the National Insurance Commission (NAICOM) to prepare well for the exercise.
The Director General of NIA, Mrs. Yetunde Ilori, who made this appeal in a statement while commenting on recent developments on the sector’s recapitalisation initiative noted that by the extension, some of the initial challenges thrown up by the first date have been addressed hence, operators now have sufficient time to comply with the directive instead of having to go into the exercise without adequate preparation and diligent execution.
Ilori added that the extension would also aid to facilitate a seamless reinsurance arrangement which is an annual programme.
According to her, it would have been absurd to conclude the recapitalisation exercise by mid-year as this might have caused a lot of disruptions.
“Now that the NAICOM 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 regulator’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.
“It is our hope that whatever recapitalisation option you have to take, the new timeline will give you ample opportunity to do so. The NIA wishes all members success in their recapitalisation plans and pray for a hitch free exercise”, she said.
Furthermore, the DG commended NAICOM for the extension of the deadline stating it was a bold step in the right direction.
“NIA appreciates the Acting Commissioner for Insurance, Mr. Sunday Thomas and management of the 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,” she said.
However, according to her, the market expects more cheery news from NAICOM by way of palliatives and incentives, especially, for those that are within its control. She said this was necessary because the cost of recapitalisation would be too heavy on the companies thus, with palliatives coming from the commission, it would assist the firms to reduce their costs and increase their shareholders’ values.
In May 2019, the NAICOM increased the capital base for insurance and reinsurance companies as follows: life insurance business from N2 billion to N8 billion, 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 which was extended to December 2020.