Against the backdrop of ongoing recapitalisation of the insurance industry, the National Insurance Commission (NAICOM) has said it will indemnify investors of firms which failed to meet the recapitalisation exercise.
This was stated by the Director, Policy & Regulation Directorate, NAICOM, Pius Agboola, who is also Chairman, Insurance industry Recapitalisation Committee, at the interactive session held recently with shareholders association of quoted insurance companies in Lagos.
Agboola who noted that all funds raised in the recapitalisation exercise would be paid into an escrow account domiciled in the Central Bank of Nigeria (CBN), emphasized that funds from companies that failed to recapitalised would be returned to investors from who the companies raised the funds.
He further said that the commission would ensure a thorough oversight on how successful companies would invest the funds raised in the recapitalisation.
Disclosing that 44 underwriting firms have received regulatory approval to continue with implementation of their recapitalisation plans, he added that NAICOM has reviewed the plans of six companies but was not satisfied with their reports and has asked them to make amend and re-submit their plans.
He noted that two insurers plans are currently undergoing review while two insurers are yet to submit their plans at all, a development he attributed to peculiar situation the erring companies are currently undergoing.
Furthermore, he urged public shareholders present at the meeting to obtain more Insurance stocks in the ongoing exercise so that they can influence decisions in their respective companies.
While stating that 80 per cent of underwriting firms want to recapitalise Initial Public Offer (IPO) and Rights Issue, he observed that only few insurers are considering mergers and acquisition in an effort to scale through the hurdle.
Informing shareholders that the exercise would grant investors to acquire good returns on their investments, he added that the essence of recapitalisation was to increase the risk capacity of local insurers so that they can retain more risks in the local market, thereby, increasing the contribution of insurance industry to the nation’s economy.