NAICOM Stops Insurance Companies from Foreign Operations
By Adedapo Adesanya
In its bid to support the local economy, the National Insurance Commission (NAICOM) has warned insurance companies not to consider foreign investment extensions post-recapitalisation, noting that funds raised will be invested locally.
According to the insurance regulator, the ongoing recapitalisation in the sector will see emphasis on supporting big businesses, pay claims, and support the Nigerian economy considering current happenings.
This was disclosed by the Acting Commissioner for Insurance, NAICOM, Mr Sunday Thomas, at a forum in Lagos, adding that the recapitalisation will not lead to more branches in foreign countries that likened to, “big as a local government in Nigeria.”
According to Mr Thomas, the commission will issue guidance note on recapitalisation by the end of March 2020, adding that the commission has observed that some companies are still pursuing businesses that are heavy burdens to them.
He maintained that recapitalisation is really necessary because when the industry is stabilised, it would help stabilised other sectors.
He reiterated that NAICOM as a regulator would ensure transparency and certainty of the process, establish orderliness of the recapitalisation process while ensuring an enabling environment to all.
Other roles that will be played by the regulator, according to the Acting Commissioner include; ensuring that recapitased companies are liquid; safety of funds raised – Payment into Escrow Account; orderly exit of un-recapitalised companies and efficient resolution of pre and post-recapitalization governance/conflicts.
Speaking further, Mr Thomas maintained that the commission was committed to sustainable growth in order to enhance the stability of the Insurance Industry in Nigeria.
“The commission had in 2019 initiated the process to recapitalise the insurance industry in order to upscale its financial standing to meet up with current economic realities and avoid imminent systemic collapse and solvency crisis in the insurance sector,” he added.
He further noted that the recapitalisation will ensure that the industry becomes more robust in its technical competence and financial base, build confidence, trust and enhance market value.
He added that the exercise is further aimed at repositioning the sector for self-actualization in terms of growth and development.