The National Insurance Commission has picked September 30, 2021 as new deadline for insurance and reinsurance companies to meet its capital requirements, extended from December 31, 2020 that was previously picked.
This was disclosed in a circular, titled, ‘Segmentation of minimum paid-up share capital requirements for insurance companies in Nigeria,’ on Wednesday.
The commission said the regulated entities must meet about half of the capital requirements by the end of December 2020.
It said, “We refer to earlier circulars referenced NAICOM/DPR/CIR/25/2019 dated May 2019 which introduced the new capital requirement for insurance companies in Nigeria, and NAICOM/DPR/CIR/25-03/2019 dated December 30, 2019 which extended the deadline for recapitalisation.
“The incidence of COVID-19 pandemic has made it difficult to proceed with the 31st December, 2020 recapitalisation deadline.
“A review of the recapitalisation deadline therefore became imperative in order to mitigate likely negative consequences of the pandemic on the exercise.
“The commission hereby extends and segments the recapitalisation process into two phases as follows:
“Fifty per cent of the minimum paid-up capital for insurance and 60 per cent for reinsurance shall be met by 31st December 2020.
“Insurance companies are required to fully comply with the approved minimum paid-up capital not later than 30th September 2021.”
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.
Life and general insurance companies were asked to shore up their existing minimum paid-up capital from N2bn and N3bn to N4bn and N5bn respectively by the end of December 2020, and meet the final minimum paid-up capital requirements of N8bn and N10bn respectively by the end of September 2021.
Composite companies and reinsurance firms were asked to shore up from existing minimum paid-up capital of N5bn and N10bn to N9bn and N12bn by end of December 2020 to N18bn and N20bn respectively by the end of September 2021.
The regulator said that all other provisions in the previous circulars were sustained.