Insurance companies have solicited one-year extension from the National Insurance Commission to meet up with its new capital requirements.
The underwriters said economic challenges resulting from the coronavirus pandemic had altered their recapitalisation plans and they would require more time to adjust to the realities in the country and global economy.
The Chairman, Nigerian Insurers Association, Mr Tope Smart, said, “Definitely, the COVID-19 pandemic has impacted the recapitalisation initiative of the sector. To that extent, NAICOM is equally aware. We are all engaging NAICOM with a view to extending the period.”
He added, “We are not expecting anything less than one year because the effect is massive, and that is the truth. In fact, analysts have predicted that the global economy will go into recession this year; so that is to tell you the impact of this pandemic, and they are not expecting things to come around until probably the middle of 2021.
“So when you take all of these into consideration, they will convince you that it is seriously impacting the recapitalisation efforts of these companies. That is why we will not expect anything less than one-year extension from the commission.”
Smart said that many of its members who had wanted to raise funds in respect of the recapitalisation were unable to do so.
He said, “Some of them had wanted to invite some foreign investors for them to be able to meet up with their recapitalisation requirement deadline. But because of this pandemic, lockdown in the whole world, that has been frustrated, and definitely, some of these things are still outstanding.
“I believe that NAICOM is aware of this, and like I said, we are engaging them, in order for them to extend the period to enable members to meet up with their recapitalisation programmes.”
The Commissioner for Insurance, Mr Sunday Thomas, in a telephone interview, told our correspondent while reacting to speculations that NAICOM was planning to extend the deadline for the underwriters’ recapitalisation.
“We are not ignoring it but it is not as if we have concluded on the methodology for the review. There are existing guidelines; so if we are going to review, we will review within the existing guidelines.”
In 2019, NAICOM introduced new capital for insurance and reinsurance companies, and gave them till end of December 2020 to meet its new requirements.