The National Insurance Commission (NAICOM) has given Insurers a 13 month ultimatum to recapitalise or lose their operating licenses. The circular dated May 20th 2019 reads in part ”In 2005/7 the Insurance Industry witnessed its last recapitalization and despite the astronomical increase in value of Insured assets, consequent exposure to higher level of Insured liabilities and operating cost of Insurers, the same capital continued to rule in the Insurance Industry” The circular read.
Under the new structure, Life Insurance companies paid capital is N8 billion from N2 billion. General companies are expected to raise N10 billion from their current N3 billion.
Composite companies will need N18 billion from their current N5 billion to remain in business while Reinsurance companies will now need N20 billion from their N10 billion. The minimum paid capital applies to all Insurance and Reinsurance companies other than Takaful operators and Micro – Insurance companies. Effective implementation date is 30th June 2020.