NAICOM Cancels Insurance Industry Recapitalisation

The controversial recapitalisation exercise in insurance industry tagged Tier Based Solvency Capital increase, initiated by the insurance industry regulator, the National Insurance Commission(NAICOM) has been canceled.

The commission officially announced the cancelation at the weekend through a circular dated Novermber23 circulated to all insurance companies.

The circular was titled “Withdrawal of circular on Tier Based Solvency Capital policy for Insurance Companies in Nigeria” and signed by NAICOM’s Director (Policy and Regulation) of the commission on behalf of the Commissioner for Insurance Alhaji Mohammed Kari.

The circular said, “Pursuant to the powers conferred by the enabling laws, the commission hereby withdraws and cancels the Circular dated August 27, 2018 with reference number NAICOM/DAPCIR/14/2018 and titled Tier Based Solvency Capital Policy for Insurance Companies in Nigeria. This withdrawal and cancellation takes immediate effect.” It noted that the cancelation became imperative due to protracted controversies that trailed the tier-based capital increase announced by NAICOM in August.

The controversy ensued when the commission shifted backwards the deadline for compliance to the capital increase by insurance firms to October 1 from January 1, 2019.

Following the downward shifting of the deadline and other issues that stoke disapproval in the ranks of the operators,the exercise met series of opposition from insurance firms, especially those who fall within tier three and who have the least capital.