NAICOM Puts On Hold Tier-Based Recapitalization

The Apex Insurance regulator, National Insurance Commission(NAICOM) has formally put on hold the implementation of its Tier-based Minimum Solvency Capital policy, also known as the recapitalization of the insurance industry.
NAICOM disclosed this in a latest circular to all insurance institutions in Nigeria titled, ‘Update on the implementation of the Tier-based Minimum Solvency Capital policy for insurance companies in Nigeria’ released on Thursday.
“In compliance with the extant rules and injunction issued by the Federal High Court regarding the Tier-based Minimum Solvency Capital framework, which was to take effect from October 1, 2018, the commission wishes to clarify that the status quo will be maintained, and insurers are to continue to operate on the subsisting regulatory framework prior to the circular”, the circular said.
“Appropriate regulatory directive will be advised upon the completion of the suit.”
Economic Confidential recalls that some stakeholders of insurance companies had dragged the commission to Court for insisting on implementing the recapitalization.
Justice Muslim Hassan had on September 13, 2018 gave the order in a class action brought by the shareholders restraining NAICOM from enforcing the TBMSC policy, pending the expiration of the 30-day pre-action notice dated September 4, 2018. At a sitting on October 8, the judge adjourned hearing in the case to October 22.
On July 25, NAICOM had announced a raise in the minimum capital base for life, non-life and composite insurance companies seeking to get licences to underwrite all risks in the country from N2bn, N3bn and N5bn to N6bn, N9bn and N15bn, respectively under its tier-based minimum solvency capital structure.
It later announced an October 1, 2018 deadline, which was not accepted by stakeholders, pushing them to take a legal action against the commission.The Punch