Barely six weeks to the December 31 deadline for the insurance sector recapitalisation, operators have implored the National Insurance Commission (NAICOM) to extend the deadline.
It was gathered that the insurers made the appeal to the regulator during a meeting of chief executive officers in the industry with the commissioner for insurance at the industry’s professionals’ forum held in Abeokuta, Ogun State recently.
They pointed out the Covid-19 outbreak and recent civil unrest and its consequential losses as their reasons for the request.
The underwriters, implored NAICOM to also consider their challenges by amending some of the requirements in the recapitalisation exercise for the sector.
They said the support of the regulator would assist to build strong underwriting companies and boost investors’ confidence in the sector.
Some of the executives who attended the meeting, disclosed that they made a request for the recapitalisation exercise process to be concluded in December 2021, while the interim milestone assessment scheduled for December 2020 be stepped down.
The executives said the operators had earlier appealed to the commission, to waive the December 2020 milestone.
“The waiver will give the insurance and reinsurance companies more time to settle back to business and pursue their full recapitalisation programme in order to meet the commission’s set objectives by 31 December, 2021,” one of the operators who pleaded to remain anonymous said.
They said the operators were more concerned about the aspect relating to attainment of certain thresholds by December 2020, failing which the commission may restrict the scope of business insurance and reinsurance companies will transact.
The operators said they had observed the huge impact of COVID-19 on the financial services sector and the national economy at large, coupled with the situation that was worsened by losses in the wake of the recent #EndSARS protest which was hijacked by hoodlums.
“We are convinced that it will take businesses especially insurance companies some time to ascertain the full extent of loss and recover from the shock of the devastating developments,” he said.
The insurers said it was therefore important that the exercise took due cognizance of the plight of companies and their shareholders.
NAICOM, had before now extended the deadline for insurance and reinsurance companies to meet its new capital requirements to September 30, 2021 from December 31, 2020.
NAICOM, also mandated that 50 per cent of the minimum paid-up capital for insurance and 60 per cent for reinsurance must be met by 31 December 2020.
The commission, had said a review of the recapitalisation deadline became imperative in order to mitigate likely negative consequences of the COVID-19 pandemic on the exercise.
NAICOM,stated that insurance companies that failed to satisfy the required minimum paid-up capital by December 31, 2020 may be restricted on the scope of business they would transact.