The National Insurance Commission (NAICOM) has extended and segmented the deadline issued to insurance companies to raise their minimum paid-up capital.
A recapitalisation deadline had earlier been fixed for December 31, 2020, which could no longer be relied on following the economic disruptions caused by the COVID-19 pandemic.
Operators now have up to September 30, 2021 to fully recapitalise in a two-phase plan.
The commission noted that the incidence of the pandemic had made it difficult to proceed with the December 31, 2020 recapitalisation deadline adding that a review of the recapitalisation timeline had become imperative in order to mitigate likely negative consequences of the pandemic on the exercise.
Consequently, NAICOM, in a circular issued Wednesday and signed by the Director, Policy and Regulation, Mr. Pius Agboola, extended and segmented the recapitalisation process into two phases.
Insurance companies were requested to meet 50 per cent of their Minimum Paid-up capital for insurance and 60 per cent for re-insurance by December 31, 2020 as well as fully comply with the approved minimum paid-up capital not later than September 30, 2021.
The commission warned that insurance companies that failed to satisfy the required recapitalisation thresholds by the December 31 deadline may be restricted on the scope of business they will transact.
Also, insurance companies are mandated to comply with the minimum paid-up capital of the recapitalisation exercise on September 30, 2021.
According to the capital segmentation, companies offering life assurance are expected to beef up their minimum paid-up capital to N4 billion in the first phase (December 31) and N8 billion by September.
General insurance firms are required to raise their capital to N5 billion and N10 billion by December and September respectively while reinsurance firms are mandated to recapitalise to the tune of N12 billion and N20 billion by December and September respectively as well as composite insurance which is also expected to beef up capital to N9 billion and N18 billion by the stipulated timelines.