Insurance firms get 13-month ultimatum for recapitalisation

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The National Insurance Commission (NAICOM) has gaven insurance companies a 13-month ultimatum to recapitalise or lose their licences.

The ultimatum, which became effective from yesterday, raised the minimum paid-up share capital of a Life insurance company from N2 billion to N8 billion; Non-Life insurance from N3 billion to N10 billion and Composite insurance from N5 billion to N18 billion.

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Re-insurance companies had been directed to raise their capital base from N10 billion to N20 billion.

With the directive, the capital injection requirement has risen by 400 per cent (Life); 333.33 per cent (Non-Life); 360 per cent (Composite) and 200 per cent (Re-Insurance).

The directive was contained in a circular issued by NAICOM to Chief Executive Officers and Managing Directors of insurance companies, mandating them to comply on or before June 30, next year.

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The circular, however, exempted micro insurance companies.

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