The House of Representatives has directed the National Insurance Commission (NAICOM) to suspend the December 31, 2020 deadline given to insurance and reinsurance firms to increase their minimum paid up capital.

The House resolution followed a motion of urgent public importance sponsored by Hon. Benjamin Kalu on the need to suspend the proposed recapitalisation in view of the pandemic and the recession being experienced in the country.

Kalu recalled that the law establishing NAICOM empowers it to regulate the sector and to prescribe minimum paid up share capital for insurance firms and intermediaries.

He said the commission issued a circular No. NAICOM /DPR/CIR/25/2019 dated May 20, 2019 prescribing a minimum paid-up share capital for insurance and reinsurance firms and effectively increased the minimum paid up share capital for insurance and reinsurance firms.

According to him, the original deadline for the minimum paid up share capital was May 29, 2019 for new firms, while, June 30, 2020 was to apply to existing firms, adding: “The changes to the minimum paid up share capital were as follows: Life Insurance N2 billion to N8 billion, General N3 billion to N10 billion, Composite N5 billion to N18 billion and Reinsurance N10 billion to N20 billion. This was later moved to  December 30, 2020.”

Kalu argued that as a result of the pandemic, the deadline was shifted and a two-phase recapitalisation programmes introduced.