The National Insurance Commission has raised the minimum capital base for composite insurance companies (life and non-life underwriters) that want to get licences to underwrite all risks in the country from N5bn to N15bn.
The risk-based solvency implementation team of the commission disclosed this during a presentation on ‘Recapitalisation of insurance companies: The tier-based minimum solvency capital’ in Lagos on Wednesday.
NAICOM also raised the minimum capital requirement of life insurance companies that want to underwrite all forms of life insurance from N2bn to N6bn; while the minimum capital base for non-life insurance companies was raised from N3bn to N9bn.
The commission, however, explained that insurance companies operating with the old capital requirements would not be forced to recapitalise but would be restricted to underwrite only certain business.
“There will be no mandatory injection of fresh capital funds by insurers; no cancellation of licence of any operator is anticipated, but subject to solvency control levels,” it stated.
It also noted that the review of the capital base did not extend to reinsurance companies.
“The tier-based minimum solvency capital structure is a complimentary measure to the ongoing implementation of the risk-based supervision programme,” NAICOM stated.
The commission specified the minimum capital of N2bn, N3bn and N6bn respectively for Tier 3, Tier 2 and Tier 1 life insurance companies, while non-life insurance firms’ minimum capital was fixed at N3bn, N4.5bn and N9bn for Tier 3, Tier 2 and Tier 1, respectively.
NAICOM stated that the new capital base would take effect from January 2019. In the new era, life insurance companies under Tier 3 will only be licensed to underwrite individual life, health and miscellaneous insurance; while the non-life under this category will be licensed to underwrite fire, motor, general accident, engineering (only classes covered by compulsory insurance), agriculture and miscellaneous insurance.
NAICOM stated that life insurance companies under Tier 2 would be licensed to underwrite all Tier 3 risks and group life assurance; while the non-life firms in this category would be allowed to underwrite all Tier 3 risks and engineering (all inclusive), marine, bonds credit guarantee and suretyship insurance.
Under the new dispensation, life insurance companies under Tier 1 will be allowed to underwrite all Tier 2 risks and annuity; while the non-life firms in this category will be allowed to underwrite all Tier 2 risks and oil and gas (oil related projects, exploration and production), and aviation insurance.
According to the commission, the TBMSC introduces a proportionate capital that supports the nature, scale and complexity of the business conducted by insurers, and is a three-level model that specifies the capital requirement for each tier based on risk classification for each tier.
The commission said it would open up the licensing window to interested investors at higher tier levels.
According to NAICOM, the industry unanimously agreed for a desirable recapitalisation at the Insurers’ Committee retreat in February in Abeokuta.
The last regulatory recapitalisation of insurance companies was carried out in February 2007.
THE ROTTEN FISH: CAN OF WORMS OPENED OF APC & TINUBU'S GOVERNMENT OVER NIGERIA'S ECONOMIC DOWNTURN
WATCH THE CRITICAL ANALYSIS AND KNOW THE RESPONSIBLE PARTIES TO BLAME FOR NIGERIA'S ECONOMIC CHALLENGES, WHILE CITIZENS ENDURE SEVERE HARDSHIPS.Watch this episode of ISSUES IN THE NEWS on 9News Nigeria featuring Peter Obi's Special Adviser, Dr Katch Ononuju, 9News Nigeria Publisher, Obinna Ejianya and Tinubu Support Group Leader, McHezekiah Eherechi
The economic crisis and hardship in Nigeria are parts of the discussion.
Watch, leave your comments, and share to create more awareness on this issue.
#9NewsNigeria #Nigeria #issuesInTheNews #politics #tinubu THE ROTTEN FISH: CAN OF WORMS OPENED ...
DON'T FORGET TO SUBSCRIBE AND LEAVE YOUR COMMENTS FOR SUBSEQUENT UPDATES
#9newsnigeria #economia #economy #nigeria #government @9newsng
www.9newsng.com