NAICOM may postpone recapitalisation
There are indications that the National Insurance Commission (NAICOM) may extend the deadline for the recapitalisation of insurance and reinsurance companies for the second time, The Nation has learnt.
The Commission is concerned about the negative impact of COVID-19 pandemic on the exercise.
While the extension may bring relief for some of the companies who may not be able to meet the December 31, others who have tidied up their books and are ready to meet the deadline may find it upsetting.
The commission had earlier extended the initial deadline for recapitalisation, which began from May 31, 2019, to end by July 31, this year to December 31. This followed pressure put on the commission by stakeholders and the operators that the time was too short.
In a circular to insurance operators titled: “Effect of COVID-19 on Insurance Operations”, Acting Commissioner, NAICOM, Mr Sunday Thomas, referred to a previous circular where it conveyed some decisions taken to ameliorate the negative impact of the outbreak of coronavirus on the sector.
He stated that the Commission will soon let the operators know the position that will be taken on the recapitalisation.
He said: “Following our further review of the development in the economy and the world over, we are concerned about the effect of COVID-19 on the ongoing recapitalisation by insurers and reinsurers. While the immediate negative impact of the COVID-19 is obvious, the scope and time it will last in Nigeria is uncertain.
“While the commission encourages all operators to put in their best in the given circumstances, the outcome of its consideration to ameliorate the negative effect will be communicated as soon as it is considered expedient.”
He, however, highlighted how the commission will operate during the lockdown in the country.
“On business continuity plans, the commission has put in place the necessary plans to enable us promptly attend to the operators’ request during this challenging period. We will continue to give attention to Applications for Approval-in-Principle (AIP), LOA, and no objection to place risk abroad etc. would continue to be given necessary attention during this period.
“While we hope for a quick recovery from the partial shutdown of economic activities, we urge the operators to put in place appropriate business continuity plans to meet the needs of insurance policyholders while the commission is readily available to assist where the need arises,’ he added.’
He assured the operators that their interest is the commission’s utmost concern. He enjoined them to abide by the preventive measures against the virus.