James Emejo in Abuja

National Insurance Commission (NAICOM), yesterday, announced the constitution of the 2025 Recapitalisation Committee, barely a week after President Bola Tinubu assented to Nigeria Insurance Industry Reform Act (NIIRA) 2025.

A 2020 push by the commission to recapitalise the industry had hit a brick wall following legal actions instituted against the regulator by operators. But the commission has now scaled the wall.

Chaired by Director of Supervision, NAICOM, Mrs. Oluwatoyin Charles, the current committee’s primary responsibility is to oversee the implementation of the recapitalisation programme. Its mandate includes ensuring compliance with revised capital requirements and promoting transparency and integrity in sourcing and verifying capital inflows.

In a statement, Commissioner for Insurance/Chief Executive, NAICOM, Mr. Olusegun Omosehin, emphasised the critical role of recapitalisation in stabilising the industry and contributing to the country’s proposed $1 trillion economy.

Speaking at the inauguration in Abuja, Omosehin urged the 11-member committee to approach their task with professionalism, diligence, and commitment to the common interest, assuring them of necessary support.

The committee’s terms of reference include to develop a recapitalisation roadmap, and create a detailed plan for the commission and the insurance industry.

It is also expected to develop guidelines and circulars on recapitalisation., and recommend the composition of minimum capital requirements.

The committee will also identify incentives and concessions that may be obtained from other regulatory authorities.

The committee will submit monthly progress reports to management and provide quarterly updates to the Governing Board and stakeholders.

The commission expressed confidence in the committee’s ability to successfully deliver on its mandate, shaping the future of the country’s insurance sector.

The committee’s success is particularly vital to the industry’s stability and growth, as NAICOM seeks to collaborate with all stakeholders to achieve this objective.

With NIIRA 2025, the commission aimed to position the insurance industry for greater transparency, innovation, and global competitiveness, aligning with the federal government’s vision of achieving a $1 trillion economy.

In December 2020, NAICOM declared it will abide by the Federal High Court ruling, which ordered it to suspend an ongoing recapitalisation exercise in the insurance industry, pending the outcome of litigation brought before the court by some aggrieved operators.

The commission had directed insurance firms to recapitalise on or before December 31,2020 and later extended it to September 30, 2021.

But the exercise encountered some legal brick walls, as Justice C. J. Aneke of the Lagos Division of the Federal High Court, on December 21, barely 10 days to the deadline, restrained the commission from taking any further steps in implementing its deadline for insurance and reinsurance companies to recapitalise.

The judge delivered ruling in an ex-parte application brought before the court by the Incorporated Trustees of the Pragmatic Shareholders’ Association of Nigeria.

In the motion, marked FHC/L/CS/1797/2020 and filed on December 15, 2020, moved on behalf of the group by their lawyer, I.C. Ifedora, the applicant prayed the court for an order of interim injunction restraining the defendant and its agents from taking further steps in the recapitalisation process in the insurance industry pending the hearing and determination of its motion on notice before the court.

Following the new development, the commission had remained silent on the judgement, keeping stakeholders in the dark regarding its next line of action and whether the recapitalisation timelines still stood.

Under the botched recapitalisation project, life insurance firms were required to meet a minimum paid-up capital of N8 billion, from the previous N2 billion, while general insurance companies were required to raise their minimum paid-up capital to N10 billion, from N3 billion.

NAICOM also raised the regulatory capital for composite insurance from N5 billion to N18 billion, while it increased the minimum capital of reinsurance businesses from N10 billion to N20 billion.

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