Industry investors have called on the National Insurance Commission (NAICOM) for extension of the Oct. 1 deadline for insurance companies to switch to Tier-Based Minimum Solvency Capital (TBMSC) based regime.
The shareholders made the call in separate interviews on Saturday in Lagos.
They posited that NAICOM should be seen to be supportive of the growth of the industry as a regulator, saying the commission’s recent actions were not indicative of an interest to see the industry grow.
Pastor Williams Adebayo, the President of Greenish Shareholders’ Association, said the commission’s TBMSC is good except that it was evolved at the wrong time.
Adebayo said: “The regulator pushed out right policies for the insurance industry; however, I plead with the commission to extend the deadline till after 2019 election.
“After the elections, the companies would have ascertained the economy’s direction and would be comfortable to raise funds if they deem it fit.”
Alhaji Shehu Mikahil, the President, Constance Shareholders Association of Nigeria (CSAN), urged NAICOM to review the deadline to enable the management of the companies to brainstorm on the perfect Tier-Based they fit in.
He stressed that the unfavourable economy had prevented many insurance companies from paying dividends to investors in the last five years.
“So the investors may not be buoyant enough; in view of this, we pleaded with the commission to extend the deadline.” he said.
Deacon Tom Ogboi, a retired director in Unic Insurance, said the commission should be seen to be supportive of the growth of the industry that it regulated
“The commission’s recent actions are not indicative of an interest to see the Industry grow while this may be thier intention.
“The timing for the new TBMSC is not right and that it is adversarial of majority of the industry.
“For Shareholders, their investments have lost value by N15 billion in the past four weeks as reported in the press.
“The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) recently said that the economy is still very fragile and that the fundamentals are not there.
“The Manufacturer Association of Nigeria (MAN), who are the major customers of the industry, said manufacturers are still in recession and have lost a lot of value.
” It is advisable to say that timing and due process are necessary for these initiatives to make the desired impact.”
NAICOM on Aug. 3, evolved new TBMSC model and all insurance companies are expected to key in on or before Oct. 1.
The commission explained that in the new TBMSC capitalisation structure, insurers would automatically fall in any of tier 1 to 3, based on their financial statement position.
“Life insurance firms need a minimum capital level of N6 billion for Tier 1; N3 billion for Tier 2 and N2 billion for Tier 3.
“Non-life business requires a minimum of N9 billion for Tier 1; N4.5 billion for Tier 2 and N3 billion for Tier 3.
“While composite companies (combination of life and general business), require a minimum of N15 billion for Tier 1; N7.5 billion for Tier 2 and N5 billion for Tier 3,” the commission explained.
The commission also said no mandatory capital was required.