By Dipo Olowookere
In order to meet the recapitalisation deadline set by its industry regulator, the National Insurance Commission (NAICOM), Consolidated Hallmark Insurance Plc is considering the different available at its disposal.
Business Post reports that some of these options include merging with another insurance company, swallowing another competitor, rights issue, public/private placements, amongst others.
On Thursday, November 21, 2019, the board is organising an Extraordinary General Meeting (EGM) in Lagos to seek approval of the company’s shareholders for these options.
The board expects to get approval to raise the authorised share capital of the insurer to N10 billion from N7.5 billion through the creation of addition 5 billion ordinary shares of the firm of 50 kobo each.
The company is also considering the option of raising additional capital of up to N1.118 billion through a rights issue of 2.033 billion shares of the company in the ratio of one new share for every four held by shareholders at 55 kobo per unit.
In addition, the company wants to get fresh funds of up to N4.5 billion through private/public, special offering, rights issue or a combination or any other methods either locally or internationally or both.
Lastly, at the EGM, the board would want to get shareholders’ approval to begin talks on possible merger and acquisition.
NAICOM had through a circular to all insurance and reinsurance companies signed by its Director in charge of Policy and Regulation Directorate, Mr Pius Agboola, on behalf of the Commissioner for Insurance, Mr Mohammed Kari, said that the new capital regime would take effect from June 30, 2020 for existing insurance and reinsurance firms, but with immediate effect for new firms entering into the business.
The regulatory agency said it was raising the minimum paid-up share capital of insurance and reinsurance firms so as to make the sector stronger and better.
Under the new capital regime, life insurance underwriting firms, which currently have a minimum paid up share capital of N2 billion, will be required to have not less than N8 billion as capital base.
Also, insurance firms underwriting general business have been asked to shore up their capital from N3 billion to N10 billion, while insurance companies underwriting both life and general business must now have N18 billion instead of the N5 billion in the former regime.
In addition, NAICOM said reinsurance companies willing to remain in business in the country must have N20 billion against the N10 billion.
Few months ago, insurance companies in the country submitted their recapitalisation plan and some days ago, NAICOM gave some of them the approval to go ahead with their strategies.
Adedapo Adesanya 
Modupe Gbadeyanka