Insurance Firms Seek December 2020 Recapitalisation Deadline Waiver

November 13, 2020
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BY ZAKA KHALIQ, Lagos  |

Nigerian insurance companies have appealed to the National Insurance Commission (NAICOM) to waive the first phase of its segmented recapitalisation for insurance and reinsurance companies scheduled to end by December 31, 2020.

Managers of insurance firms, who spoke during a meeting of insurance companies’ CEOs with the commissioner for insurance, Mr. Sunday Thomas at the industry’s professional forum in Abeokuta, Ogun State recently, urged the regulatory body to consider their challenges by amending some of the requirements in the recapitalisation exercise in the sector.

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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 be stepped down.

The operators 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 from the nationwide #EndSARS protests.

“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,” an anonymous operator said.

Speaking at a conference in Lagos recently, the chairman, Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi, said, insurance is a business of pools, hence, no serious need for industry-induced recapitalisation, stating that, players should be allowed to recapitalise individually according to the risk they want to absorb.

Moreover, he said, the ongoing recapitalisation exercise is also creating opportunity for foreign investors to take over local underwriting firms for a peanuts, especially, with the volatility in the forex market which favours dollar at the expense of the Nigerian Naira.

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