Ahead of the December 31, 2020 deadline for insurance companies in the country to recapitalize their share capital, the National Insurance Commission says it plans to achieve 70 per cent local retention of the risks in the industry under its recapitalisation initiative.
While disclosing its strategic focus this year, the commission stated that the recapitalisation of insurance and reinsurance companies would strengthen the financial position of the companies; reduce risk of insolvency; encourage consolidation; and protect policyholders.
The commission stated that the recapitalisation would, “Enhance safety and soundness in the subsector; ensure 70 per cent increase in local retention; consolidation of operators; and encourage investments in the insurance sector.”
NAICOM said to realise this, it issued a recapitalisation directive and had engagement with relevant regulators in the financial sector on getting some palliatives for the regulated entitites. To help the underwriters, he said the deadline for recapitalisation was extended to December, 31, 2020 from the initial June 30, 2020.
So far, six insurance companies had notified NAICOM of their plans to merge as part of their efforts to meet the regulator’s recapitalisation requirements.
