Finally, there is a popular saying that ‘if Mountain cannot go to Muhammed, then, Muhammed have to go to the mountain’ in this case since the stakeholders refused to accept the policy then the National Insurance Commission (NAICOM), the regulator has to go to the stakeholders’ needs by announced the suspension of the implementation of its Tier-based Minimum Solvency Capital policy, otherwise known as the recapitalisation of the industry.
The regulator, in a circular to all insurance institutions entitled, ‘Update on the implementation of the Tier-based Minimum Solvency Capital policy for insurance companies in Nigeria’ directed insurance companies to continue with the subsisting regulatory framework prior to the circular.
According to NAICOM
“In compliance with the extant rules and injunction issued by the Federal High Court as regarding the Tier-based Minimum Solvency Capital framework, which was slated to take effect from October 1, 2018, the Commission wishes to clarify that the status quo will be maintained and insurers are to continue to operate on the subsisting regulatory framework prior to the circular.”
The circular was silent on what will happened to the policy in the future like either re-introduce after court case or discarded forever?
Some of the stakeholders did as they promised of court case against the commission, if it trying enforces the policy on the operators.
The case which Justice Muslim Hassan since in September 2018 had, gave the order in a class action brought by the shareholders restraining NAICOM from enforcing the TBMSC policy, pending the expiration of the 30-day pre-action notice dated September 4, 2018.
The new capital requirements:
Tier one is the highest capital base for each class. Tier three is the minimum capital base required for each class.
Life insurance firms now have three capitalisation tiers. Tier one companies will be required to have ₦6 billion as capital. Tier two life insurance firms will be required to have ₦3 billion, while tier three firms will maintain the current requirements of ₦2 billion.
Non-life insurance firms will now have three tiers. Tier one non-life firms are mandated to have a capital base of ₦9 billion. Tier two firms in this segment are expected to have a capital base of ₦4.5 billion, while tier three firms will maintain the current capital base of ₦3 billion.
Insurance companies operating in the composite segment, that is all classes of insurance now have three tiers. Companies operating in the tier one will be required to have a capital base of ₦15 billion. Tier two firms will need to have a capital base of ₦7.5 billion, while those in tier three will maintain the current capital base of ₦5 billion.
The Caption Photo:The Commissioner for Insurance, Alhaji Mohammed Kari