NAICOM explains need for insurance recapitalisation
Noting that although operators may not have the wherewithal for the recapitalisation of their respective companies, it said the onus, however, lies on the regulator to set the standards that will strengthen underwriters’ capacities, and place them in a position to undertake insurance businesses.
NAICOM Deputy Commissioner (Technical), Sunday Thomas who stood in for Commissioner for Insurance, stated this weekend, at a seminar for journalists in Ijebu-Ode, Ogun State.
The seminar themed: “Recapitalisation Road Map: Implementation, Expectations, and Benefits,” was organised by NAICOM.
Giving more insight into the need for recapitalisation, Thomas explained that the process will enable the sector retain insurance businesses instead of ceding them outside the country; turn the image of the market, strengthen financial base of the companies, increase the sector’s contributions to gross domestic product (GDP), and a host of other benefits.
Thomas said: “We have the mandate to ensure that the recapitalisation throws up more solid companies. Our hands are open to welcome investors in new companies or existing companies.”
He emphasised that NAICOM targets having companies and an insurance sector that will support the government to build a viable economy.
In his presentation of the theme paper, the NAICOM Director (Policy and Regulations), Pius Agboola, recalled previous attempts of recapitalising insurance companies to include in 2005/2007 as well as the attempt to introduce the Tier Based Recapitalisation process in 2012/2014.
He explained recapitalisation underscores the need for capital restructuring, improvement in the liquidity position of the insurance underwriters; noting that the insurance industry life cycle is still at the early growth stage, which needs to be explored; and the emergence of holding companies, conglomerates, and consolidation of businesses.
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