By Adedapo Adesanya
The National Insurance Commission (NAICOM) has said verification of the capital raised by insurance companies in the ongoing recapitalisation exercise will commence on September 21, 2020.
This was disclosed in a circular signed by the Director, Policy and Regulations, NAICOM, Mr Pius Agboola, on behalf of the Commissioner for Insurance, Mr Sunday Thomas, titled Re: Minimum Paid Up Share Capital Policy for Insurance and Reinsurance Companies in Nigeria.
Mr Agboola said the circular was in furtherance to the commission’s earlier notices referenced NAICOM/DPR/CIR/25/2019 dated May 20, 2019, July 23, 2019, and December 30, 2019, on the subject matter.
He said that the minimum paid-up share capital shall be through any or a combination of either with existing paid-up share capital, cash payment for new shares, retained earnings – capitalisation of undistributed profits.
He said payment also includes properties, treasury bills, shares, bonds, share premium among others for new shares issued which must be converted to cash not later than three months to the recapitalisation deadline.
According to him, the above components are to be converted to paid-up share capital in compliance with the recapitalisation exercise and applicable laws and regulations in Nigeria.
“For Private Placement, appropriate clarification has been obtained from the relevant regulatory agency to the effect that insurance and reinsurance companies may offer more than 30 per cent of the existing issued and fully paid shares.
“Submission of recapitalisation progress report shall now be monthly and the report shall be submitted not later than five working days after the end of each month, effective end of August,” he said.
The Insurance regulator stated that timeline and activities for the first phase of the recapitalisation have been scheduled to commence on August 30 for submission of a monthly recapitalisation progress report.
He said completion of the submitted reports would be five working days after the end of each month.
The commission’s director noted that all mergers for the purpose of meeting the first phase of November 30, 2020, recapitalisation would commence on September 14 and shall be irreversible except with written approval of the commission.
According to him, NAICOM shall commence capital verification on September 21 while communication of capital verification report to respective companies shall begin on November 30, 2020, and end January 21, 2021.
Speaking on the deadline for compliance with the first phase of the new minimum, it was stated that paid-up capital by all existing companies remains December 31, 2020, and issuance of letters of compliance as at date is February 26, 2021.
Modupe Gbadeyanka