The Association of Registered Insurance Agents of Nigeria on Monday urged the National Insurance Commission to extend the Jan. 1, 2019 recapitalisation deadline for insurance firms.
Ademola Ifagbayi said in Lagos that the extension would give the operators more time to explore the best option to apply.
Ifagbayi said 10 years after an earlier recapitalisation was too short to begin a fresh recapitalisation exercise.
The News Agency of Nigeria reports that the notification letter to the operators on assessed capital level held from August 13 to 17, 2018 while the submission of board’s decision by operators to NAICOM will be not later than September 14, 2018.
NAICOM also introduced a three-tier based recapitalisation for the insurance industry.
To this end, composite insurance companies who are now interested in playing in the Tier 1 category are now expected to increase their capitalisation from N5 billion to N15 billion.
Those interested in the same tier but operating life business are mandated to upgrade their capital base from N2 billion to N6 billion.
A non-life insurer planning to play in this tier are expected to improve capitalisation from N3 billion to N9 billion.
Composite insurers willing to operate in Tier 2 are expected to increase their capitalization to N7.5 billion while non-life operators are mandated to increase their capital base to N4.5 billion.
Life insurance operators under Tier 2 category are expected to increase capitalisation to 3 billion.
However, for insurers willing to play in the lowest tier, which is Tier 3, they are expected to maintain the current capital base of the Insurance industry.
To this end, Non Life insurance firms in Tier 3 to maintain N3 billion; Life Insurance operators, N2 billion and Composite insurers are to maintain N5 billion capitalization.
The commission said it was not withdrawing any licence, but to ensure a company had adequate capital to absorb risks.
Ifagbayi, who lauded the recapitilisation exercise, urged NAICOM to move the deadline to another date to enable the operators make a decisive choice.
According to him, the recapitalisation is good because it will create a financially strong insurance sector capable of deploying its agents to penetrate the nooks and crannies of the country.
He added: “However, insurance companies need more time to understand the new recapitalisation model and make a decision on where to play.”