Firms hurry to meet recapitalisation deadline

Companies are mopping to recapitalise, Omobola Tolu-Kusimo report

 

THE National Insurance Commission (NAICOM) on May 20, last year gave the 58 insurance firms a 13-month ultimatum to recapitalise or lose their licences by last June 30.

It raised the minimum paid-up share capital of a life insurance company from N2 billion to N8 billion; non-life insurance from N3 billion to N10 billion and composite insurance from N5 billion to N18 billion and re-insurance companies were asked to raise their capital base from N10 billion to N20 billion.

The deadline for compliance was initially extended to December 31, following appeals by operators. But the  COVID-19 pandemic compelled the regulator to further segment and extend the deadline to December 31, this year and September 2021.

Meanwhile, the commission is set to restrict insurance companies that will fail to satisfy the required minimum paid-up capital by the end of December 31 on the scope of businesses they will transact.

To avoid the sanction, many companies are working to meet up the recapitalisation.

Findings have, however, shown that majority of the insurance companies are mopping up their activities meet the recapitalisation mandate.

Chairman, Lasaco Assurance Plc, Mrs Aderinola Disu on said following the approval of shareholders at the Extraordinary General Meeting in 2018, the company engaged the experts to actualise the recapitalisation plans before the deadline.

She stated that the deadline has been further extended to September 2021 for full compliance and this December for compliance with phase one of the recapitalisation and their goal is to have completed this phase before the end of next month.

Chairman, Sunu Assurance Plc, Mr Kyari Abba Bukar said the company has obtained the approvals of NAICOM, FRCN, and CAC for the completion of the share reconstruction exercise and conversion of the Bond debt to equity.

Similarly, the Federal High Court, Lagos Division has sanctioned the company’s application for the confirmation of the reduction of the issued share capital of the company as required by Section 106 of CAMA.

He noted that by December 31, this year, the company would have satisfied the required minimum paid-up capital of N5 billion.

In addition, he said efforts would be made to achieve all they needed to do before the deadline.

The Managing Director/ Chief Executive Officer, Capital Express Assurance, Mrs Adebola Odukale, also affirmed that the company had been working hard to meet the recapitalisation requirements.