Nigeria: Recapitalization - NAICOM Extends Deadline to December 2020

The National Insurance Commission (NAICOM) has extended the insurance industry recapitalisation deadline from June 2020 to December 31, 2020.

NAICOM announced the extension in a circular signed by its Director, Policy and Regulation Directorate, Pius Agboola, yesterday.

The circular titled; "Minimum Paid Up share Capital Policy for Insurance and Reinsurance Companies in Nigeria"; dated December 30, 2019 was addressed to all insurance companies.

However, the new paid-up capital requirement for all categories of insurance companies still stands, NAICOM said in the circular.

Based on the new recapitalization requirement announced by NAICOM in May 2019, life insurance companies will now have a minim paid-up capital of N8bn from its previous N2bn, General Insurance companies will now have to recapitalize to N10bn from N3bn, while Composite Insurance companies will now need N18bn to underwrite businesses from the previous N5bn minimum capital.

The new capital base requirement also affected reinsurance companies who will now have to raise their minimum paid-up capital from N10bn to N20bn if they must remain in business.

In the circular announcing the extension, NAICOM noted that "it has reviewed the recapitalisation plans submitted by operators and various levels of compliance observed, and noted the inputs from the various engagements with relevant stakeholders, therefore, extends the recapitalisation deadline to December 31, 2020."

NAICOM indicated that the Central Bank of Nigeria (CBN) has obliged it with the recapitalisation escrow accounts (T24) for the deposit of fresh funds raised for the recapitalization.

It maintained that as parts of the measures to ease the recapitalisation, some of the relevant agencies have set up help desk to fast track processing of applications for 'No Objection' and for approvals, stressing that engagements with these agencies on other palliatives are ongoing.

Source: All Africa