Posted by KELVIN EGERUE, Insurance Editor on
CHIEFTAINS of insurance industry in Nigeria yesterday reacted swiftly to the new capital requirement imposed on insurance and re-insurance companies Monday with many stakeholders predicting a drastic reduction in the number of operating companies.
CHIEFTAINS of insurance industry in Nigeria yesterday reacted swiftly to the new capital requirement imposed on insurance and re-insurance companies Monday with many stakeholders predicting a drastic reduction in the number of operating companies.
It was gathered in Lagos yesterday that barring any off the cuff activities, no more than 25 insurance firms will survive the March, 2007 deadline allowed insurance institutions to mobilise the fresh capital requirement.
Finance Minister, Dr. (Mrs.) Ngozi Okonjo-Iweala had on Monday announced new sets of capital bases for the insurance industry.
Okonjo-Iweala said the capital base for life insurance is now N2 billion against the existing N150 million while that of general insurance was reviewed from N2 million to N3 billion.
Reaction of insurance chiefs came even as the Senate Committee on Banking and Currency summoned authorities of the Central Bank of Nigeria (CBN) and the Nigerian Security Printing and Minting Company (NSPMC) to appear before it today to explain both the increase in capital base of insurance firms and the proposed N1,000 notes.
Executive Vice Chairman of Guardian Trust Insurance Company (GTI), Mr. Dan Okechi told Daily Champion that the new minimum capital base will help refocus the business of insurance in the country.
There were, however, strong indications that Senate may have opposed the new capital structure following revelations that the Commissioner for Insurance, Chief Emmanuel Okechukwu Chukwulozie may have been summoned to appear before the lawmakers.
Briefing Senate correspondents yesterday on the day's stakeholders meeting, the Vice Chairman of the Banking and Committee Senator Farouk Bello said that the Senate was not briefed on the planned capital base regime for insurance companies.
President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Prince Feyisayo Soyewo reacting to the recapitalisation baselines, argued yesterday that the much that the Federal Government can do is to initiate policies and programmes capable of assisting various insurance firms to meet up with the new capital requirement.
Prince Soyewo contended that the Federal Government can do well to pay the over N20 billion premium which it owed the various companies on the insurance which it placed with them. The measure, he argued, will fall in line with the debt forogiveness which CBN recently granted some banks.
Director General of the umbrella body of insurance firms in the country, Nigerian Insurance Association (NIA), Mr. Ezekiel Chiejina in his own reaction, said that the asociation is only interested in initiating measures capable of guaranting the survival of all its member companies.