The National Insurance Commission on Monday announced the recapitalisation of insurance and reinsurance companies in the country.
The Head, Commissioners Directorate of NAICOM, Salami Rasaaq, disclosed this in a statement in Abuja.
Rasaaq said the minimum capital base for life insurance companies was increased from N2 billion to N8 billion, while General Insurance was increased from N3 billion to N10 billion.
He said Composite insurance was increased from N5 billion to N18 billion, while reinsurance capital base was increased to N20 billion from N10 billion capital base.
Rasaaq said: “The circular shall apply to all insurance and reinsurance companies other than takaful operators and micro insurance companies.
“The new minimum paid-up share capital requirement shall take effect from the commencement date of the circular for new applications which is May 20, 2019.
“Existing insurance and reinsurance companies shall be required to fully comply not later than June 30, 2020.
“The provision in respect of requirement of statutory deposit as stipulated in part three, Section 10 of the Insurance Act 2003 shall apply on the effective date of commencement.
“And all insurance and reinsurance companies are required to ensure strict compliance with the circular.”
According to Rassaq, the insurance industry witnessed its last recapitalisation in 2005/2007.
He said in spite of the astronomical increase in value of insured assets, consequent exposure to higher level of insured liabilities and operating cost of insurers, the same capital continued to rule in the insurance industry.
He said the commission exercised the power conferred on it by law to review the minimum capital base for the companies in the country.