Economy
NAICOM to Raise Capital Base of Micro Insurance Firms
By Adedapo Adesanya
The National Insurance Commission (NAICOM) has disclosed that it was considering the idea of raising operating capital of micro-insurance businesses in Nigeria.
This was made known by the Commissioner for Insurance, Mr Sunday Thomas, in an exclusive interview with NAIPCO Trumpet, a journal published by the National Association of Insurance and Pension Correspondents (NAIPCO).
He noted that the amount of capital required for micro-insurance underwriting with respect to some of the sectors is looking unrealistic and that NAICOM may have to step in.
In his words, “Micro-insurance is one of the areas we want to fast track the process. We have a couple of applications that we should be able to conclude soon.
“One thing is for you to initiate something, another is for others to see the viability of the vision. We have this but people seem to be catching up with us in terms of our vision and their understanding of these vision.
“For us, micro-insurance in financial inclusion generally is the way to go. Financial inclusion is going to help us and it is going to drive penetration. I believe that with the way we are going about it, things will get better.
“We are trying to rejig the entire guideline to be more realistic. What we had before in the guideline issued about six years ago was the National, State and the Unit licensing of micro-insurance companies. The amount of capital required for this with respect to some of the sectors is looking unrealistic and we may have to tinker with it,” he said.
Clarifying the regulator’s position if it will lower the capital base of micro-insurance operation, Mr Thomas answered in the negative.
“No, it can’t get lower because if you look at the unit which requires N40 million thereabout, what can it do when you want to establish a sustainable company,” he asked.
He noted that the capital looked adequate as at the time it was conceptualised but obviously it is no longer adequate at the moment, stressing that the exchange rate was about N160 to a dollar when the business was conceptualised and now it is triple that amount.
He said this does not seem good to drive the business from a sustainable basis, adding that the commission is presently looking at business.
“So far, we have two that are States and one that has a National outlook which is Consolidated Hallmark. Already, the company has an insurance culture. The National company is required to operate with N600 million and of course, it will not be adequate. So we still believe that we need to do much more in micro-insurance and financial inclusion in general, for us to get the desired penetration,” he said.
According to the guideline on micro-insurance issued by NAICOM, a National Insurer, who seek composite micro-insurance licence, is expected to be capitalised to the tune of N600 million, while N400 million minimum capital base is needed from a general micro-insurance and N200 million for Life operations.
It noted that national operators are allowed to have a presence in at least six states within the three geopolitical zones of the federation.
For a state microinsurer, the minimum capital base is pegged at NI00 million, broken into N60 million for general and N40 million for life operators. The regulator also expects such underwriter to operate only in one state of federation with at least three branches or office locations, each in a different Local Government Area.
A unit microinsurer investor must be capitalised to the tune of N40 million, N25 for general business and N15 million for life, with operation in one location within a local community.
The regulator has, therefore, made it mandatory for these microinsurance outfits to make themselves visible and must be seen to be serving the low-income earners grassroots.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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