By Adedapo Adesanya
The National Insurance Commission (NAICOM) has rolled out its three-year strategic reform (2021-2023) that will see the transformation of the insurance sector.
The commission said the starting point of the reform was to return operating firms to liquidity status by ensuring that they restructure their balance sheets so that those that currently rely on assets that they can hardly turn to cash would effect a major turnaround in their operations and run their business based on cash flow instead of fixed assets.
According to the commission, it has already started this through expert advice on owners of various insurance firms in order not to repeat or face some challenges it had in the past.
For instance, it noted that firms exceeded the maximum level of investment in real estate and are now facing a cash crunch and could not easily turn their assets to cash to keep afloat in business.
It further said it is strictly guiding operators to ensure that going forward none exceeds the 25 per cent maximum investment in the real estate sector.
Making the disclosure recently, NAICOM’s Director of Supervision, Mr Thompson Barineka, who was speaking on behalf of the Commissioner for Insurance, Mr Sunday Thompson, said that most of the firms currently regarded as weak were considered so because they could not quickly turn those assets into cash and continue to discharge their responsibilities to the public.
Mr Thomas said this being the case, the agency, having accomplished the five-year strategic plans it had set for itself, is now embarking on a three-year reform.
This new reform is aimed at positioning the commission as a globally competitive regulator whose functions are compliant with global best practices and whose supervisory roles support strong insurance institutions that can stand the risks of other economic operators and meet the prevailing needs of the insuring public.
The reforms, according to Mr Thomas, rest on five strong pillars namely: entrenching effective and efficient service delivery; ensuring safe, sound and stable insurance sector; adequately protecting policyholders and public interest; improving trust and confidence in the insurance sector; encouraging innovation, and promotion of insurance market development.
According to him, the reform also gears towards ensuring absolute trust on the commission through its promotion of insurance market development tailored towards improving the scope of internal rule-base to a new risk-based supervision approach using its new integrated governance management system.
He further noted that some unexpected occurrences necessitated the need of the reforms, considering the fact that since the development of the last strategic plan which lasted between 2016 – 2020, there have been various events such as the COVID-19 pandemic, the #EndSARS protests, and the rise in kidnappings, armed banditry, communal tensions and conflicts, which have impacted on the activities and initiatives of the commission.
According to him, these events have ushered in the new normal hence shaping how the industry conducts its business going forward and the corresponding regulatory response.
He said this has also created the need to prepare the workforce for the new work order, protection of policyholders, improving human capital, leveraging on technology and creating alternative channels of insurance distribution to stimulate productivity.
He further said NAICOM would also ensure periodic review and performance monitoring of the plan within its life span bearing in mind the pandemic.
He noted that within the first year of his administration, stability has been achieved within the commission and the entire industry with staff welfare at the front burner.
He also noted that his administration has been able to issue licenses to five insurance firms in the category of three life insurance, one general insurance and one reinsurance operator.
Mr Thomas said before his tenure, the last reinsurance firm licensed in the country was 32 years ago while the last insurance firm was licensed 10 years ago.
The NAICOM boss said in line with the three-year strategic reforms, his administration saw the need to bring in new life insurance operators because, in today’s economy, one area driving the flow of funds to the industry is life business.
“Why South Africa is dominating insurance market in Africa is because of its strength in the life insurance business.
“Today in Nigeria, the contributory pension asset is in the neighbourhood of over N12 trillion, it is expected that some of these funds will find their ways to the insurance sector but at present, insurers are still scratching business on the surface,” he added
NGX Lists 29.4 billion GT HoldCo Shares at N28.55 Each
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited has finally listed 29,431,179,224 ordinary shares of Guaranty Trust Holding Company (GT HoldCo) Plc on its trading platform.
The stocks were admitted on the exchange on Thursday, June 24, 2021, after the delisting of the entire GTBank equities on the same platform.
Business Post reports that the shares were listed today at a unit price of N28.55.
Last Friday, the stock exchange placed trading in the equities of GTBank on full suspension ahead of their delisting to allow the introduction of GT HoldCo shares.
Today, the GTBank shares were removed from the exchange, a total of 29,431,179,224 and were replaced with 29,431,179,224 units of GT HoldCo.
Confirming this development, the NGX in a circular said, “We refer to our market bulletin with reference number NGX REG/LRD/MB16/21/06/18 dated June 18, 2021, wherein the market was notified that trading in the shares of Guaranty Trust Bank Plc (GTB) was placed on full suspension effective Friday, June 18, 2021, in preparation for the delisting of GTB and listing of the Holding Company, Guaranty Trust Holding Company Plc (GT HoldCo).
“The market is hereby notified that the entire 29,431,179,224 issued shares of GTB were delisted from the daily official list of the NGX today, June 24, 2021, while GT Holdco’s entire issued share capital of 29,431,179,224 ordinary shares of 50 kobo each were also today, June 24, 2021, listed on the daily official list of NGX at N28.55 per share.
“The delisting of GTB and listing of GT HoldCo on NGX is pursuant to the Scheme of Arrangement between Guaranty Trust Bank Plc and the holders of its fully paid ordinary shares of 50 kobo each as approved by the Securities and Exchange Commission (SEC) and sanctioned by the court.”
GTBank restructured its business to allow it to offer more services and improve the earnings and value of the company. This led to the change to a financial HoldCo, with GTBank becoming a private company and will operate as a banking institution.
Other subsidiaries were created to offer services in financial technology (fintech), insurance, asset management and other sectors.
June 2021 Allocation to FG, States, LGs Drops to N605.96bn
By Adedapo Adesanya
The federal government, the 36 states of the federation and the 774 local government areas shared the sum of N605.96 billion from the revenue generated in May 2021.
This was disclosed by the Federation Accounts Allocation Committee (FAAC) in a communique released on Thursday after its meeting held via virtual conferencing.
Giving a breakdown of the disbursement, the committee explained that from the inclusive cost of collection to Nigeria Customs Service (NCS), Department of Petroleum Resources (DPR) and Federal Inland Revenue Service (FIRS), the federal government received N242.1 billion, the states received N194.2 billion, while the local government councils got N143.7 billion.
The nine oil-producing states of Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Abia and Lagos all received N26.9 billion as a 13 per cent derivation of mineral revenue.
The communique issued by the FAAC at the end of the meeting indicated that the gross revenue available from the Value Added Tax (VAT) for May 2021 was N181.1 billion as against N176.7 billion achieved in the preceding month of April 2021. This resulted in an increase of N4.368 billion.
The distribution is as follows; federal government got N25.3 billion, the states received N84.2 billion and local government councils received N58.9 billion.
The distributed statutory revenue of N428.198 billion received for the month was lower than the N497.385 billion received for the previous month by N69.197 billion, from which the federal government received N175.5 billion, states got N89.0 billion, while the LGs got N69.6 billion, and the 13 per cent mineral derivation handed to the nine oil states amounted to N24.666 billion.
The communique also revealed that Companies Income Tax (CIT), and Oil and Gas Royalties, Import and Excise Duty decreased in the month, meaning only VAT increased in the month under review, although marginally.
The communique, however, disclosed that total revenue distributable for the current month inclusive of gross statutory revenue of N357.9 billion, VAT of N168.4 billion, solid mineral revenue of N7.9 billion, exchange gain of N1.7 billion and augmentation from oil and non-oil revenue of N50 billion and N20 billion respectively brought the total distributable revenue to N605.958 billion.
National LPG Takes Sensitization to 12 States
By Adedapo Adesanya
The National Liquefied Gas Petroleum (LGP) sensitization and awareness campaign to reduce gas flare has kickstarted in 12 states across the country.
Speaking at a two-day sensitization and awareness campaign held in Abuja, Mr Dayo Adeshina, the programme manager National LPG expansion implementation plan (NLEIP), said the exercise was the commitment of the climate change initiative to reduce emission by 20 per cent.
He said the National LPG pilot programme, which will start after the sensitization, is to begin in Enugu and Ebonyi States for South-East then to the South-South States of Delta and Bayelsa and in the South West – Lagos and Ogun.
In the North West are Sokoto and Katsina States; the North East batch will be done in Bauchi and Gombe States while in the North Central, it will kick off in Niger and the Federal Capital Territory (FCT).
He said, “The sensitization awareness campaign is targeted at 12 pilot states, two in each geo-political zone. During the campaign, we will highlight the importance of the LGP to the government and the people.
“Every year almost nine hundred thousand people are affected by the effects of kerosine and charcoal which leads to malaria, the government plan is to display the energy mixture which currently stands at 65 per cent, kerosine 30 per cent, LPG 5 per cent.
“LPG would ensure accessibility, acceptability and affordability.”
Mr Adeshina said to drive the exercise well, an inter-ministerial committee on LPG was constituted and is being headed by the Vice President, Mr Yemi Osinbajo, adding that the composition of the committee shows the commitment of the federal government to the expansion and implementation of LPG in Nigeria.
“So, to make it available, some of the policy directives were worked on and past in 2017, the government will remove necessary bottlenecks,” he said.
LPG is a fossil fuel closely linked to oil. As a fuel, it is used for cooking, lighting, and central heating. It is a clean-burning, non-poisonous, dependable and high-performance fuel stored and transported in containers as a liquid, but is generally drawn out and used as gas.
LPG has a very wide variety of uses, mainly used across many different markets – agricultural, recreation, hospitality, calefaction, construction, sailing and fishing sectors – as an efficient fuel.
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