Wednesday, February 19, 2025
32 C
Lagos

Insurers, Shareholders Condemn NAICOM over N20bn Capital Base

Chief executives of insurance companies and shareholder groups have condemned the National Insurance Commission (NAICOM) for increasing the capital base of life insurance companies to N8 billion; N10 billion for general insurers and N18 billion for composite firms. And for reinsurance firms, the new capital level is N20 billion.

Two days ago, NAICOM announced the capital increase via a circular – NAICOM/DPR/CIR/25/2019, titled “Minimum paid-up share capital for insurance and reinsurance companies”
mandating operators in the insurance sector to comply by shoring up their capital base in line with its directive on or before June 30, 2020 or forfeit their operating licence.

Yesterday, a prominent chief executive officer in the industry told Business Journal: “This sudden announcement of N10 billion capital base for insurance firms and N18 billion for reinsurance companies is very unfortunate because of the parlous state of the economy. How many shareholders and investors are willing to pump in such billions into an insurance sector that is still declaring Kobo, Kobo dividend?

This new round of recapitalisation will impact negatively on the industry both now and in the long run.”

Another CEO also quipped in: “What the industry needs now is more public awareness and adoption of insurance by Nigerians, not injection of billions of naira as capital base. The capital we have now is more than adequate to run the business. The fact that one or two insurance firms are experiencing challenges due to wrong management decisions in terms of investment is not a plausible reason to push the market into another recapitalisation process. I am really afraid of the future of this industry if things continue this way.”

And for shareholders, the NAICOM recapitalisation policy is an ill-wind that will blow negatively on the fortunes of shareholders.

Sir Sunny Nwosu, National President of the Independent Shareholders Association of Nigeria (ISAN), accused NAICOM of threatening the safety of the investment of shareholders in the sector.

Nwosu added that the industry does not need such high level of capital to operate profitably.

spot_img
spot_img
spot_img

Hot this week

Fidelity Bank Enhances Educational Facilities in Benin, Abuja

Fidelity Bank Plc, a leading financial institution, has once...

NCDMB Chief Visits Samsung, Africoat, Insists on Patronage of Local Facilities

The Executive Secretary, Nigerian Content Development and Monitoring Board...

Engr Jimi Onanuga Honoured at 93rd Anniversary of ICOBA

Engineer Jimi Onanuga (left) received Prestigious Service to ICOBA...

NCDMB, Starzs Gas, Upbeat about Industrialisation at Ceremony for Integrated CNG Project

General Manager, Corporate Communications and Zonal Coordination, Nigerian Content...

Cairo Ojougboh: Family Marks One Year Memorial with Charity Outreach

Mrs. Bose Ojougboh, wife of the Late Dr. Cairo...

Topics

Android Losing Global Market Share

Google’s dominance over the smartphone landscape appears to be...

FRSC Celebrity Special Marshals, Unit 2, Flags Off End of Year Campaign

As part of its efforts to reduce road crash...

ADB Bags 2016 Organisation of the Year Award

The African Development Bank Group was named the African...

NEXIM Tasks SMEs in South East, Delta States on N550bn Export Facility

L – R: Chinedu Moghalu, Regional Head, NEXIM Bank,...

Savannah Energy Reports H1 2024 Result with 3% Rise in Nigerian Production

Savannah Energy Plc, the British independent energy company focused...

World Bank Dumps Doing Business Report over Data Irregularities

The World Bank Group issued the following statement on the...

Ardova Commends Stanbic IBTC’s Support for LPG Storage Project

AP LPG terminal, a fully owned subsidiary of Ardova...

ZTE Signs 5G R&D MoU with SoftBank

ZTE says that it has signed a deal with Japan's SoftBank to collaborate on research and development on pre 5G networks technology. Under the MOU, the two companies will cooperate on R&D, evaluation and verification of mobile communications solutions based on ZTE's Pre5G technology, including Massive MIMO (multiple input multiple output).
spot_img

Related Articles

Popular Categories

spot_imgspot_img