By Rukayat Adeyemi
Dec. 31,2020 The National Insurance Commission (NAICOM) on Thursday said that it would comply with court order to suspend the ongoing recapitalistion of the insurance industry.
The deadline for the first phase of the exercise had been put at Dec. 31, 2020.
“You are aware that the issue is in court and there is an interim order of the court.
” NAICOM being a responsible and law abiding organisation will respect the order of the court, ” Mr Rasaq Salami, spokesperson to NAICOM confirmed in a telephone interview with the News Agency of Nigeria (NAN) in Lagos.
Justice C. J. Aneke of the Lagos Division of the Federal High Court had in a ruling restrained NAICOM from going on with the recapitalisation of insurance and re- insurance companies as proposed.
The judge delivered the ruling on an ex-parte application brought before the court by the Incorporated Trustees of the Pragmatic Shareholders’ Association of Nigeria.
In a motion, marked FHC/L/CS/1797/2020, filed by the group on Dec. 15, 2020, the applicant had prayed the court for an order of interim injunction restraining the defendant and its agents from taking further steps in the recapitalisation process in the insurance industry .
The restriction is pending the hearing and determination of its motion on notice before the court.
Recall that NAICOM had directed that insurance companies pay 50 per cent of the minimum paid-up capital while Re-insurance companies were expected to pay 60 per cent by Dec. 31, 2020.
In the segmentation, Life Insurance business with existing minimum paid-up capital of N2 billion were expected to pay a minimum paid – up capital of N4 billion by Dec. 31, 2020 and N8 billion by Sept. 30, 2021.
General Insurance business with existing minimum paid-up capital of N3 billion was expected to pay a minimum paid-up capital of N5 billion by Dec. 31, 2020 and N10 billion by Sept. 30, 2021.
Composite Insurance business with existing minimum paid-up capital of N5 billion was expected to pay a minimum paid-up capital of N9 billion by Dec. 31. 2020 and N18 billion by Sept. 30, 2021.
Reinsurance business with existing minimum paid-up capital of N10 billion was expected to pay a minimum of N12 billion by Dec. 31, 2020 and N20 billion by Sept. 30, 2021.
Recall that the House of Representatives had also urged NAICOM to suspend the Dec. 31 deadline for the first phase of the recapitalisation for not less than six months.
The House resolution followed a motion of urgent public importance sponsored by Mr Benjamin Kalu on the need to suspend the proposed recapitalisation in view of the coronavirus pandemic and the recession being experienced in the country.