No less than N77billion would be taken away from insurance industry by government agencies to realise the expected injection of an additional N200billion into the industry in the cause of the ongoing recapitalisation exercise, a recent report has revealed.
According to the report, the recapitalisation cost was drawn from fees to be paid to the Nigerian Securities and Exchange Commission (SEC), tax and stamp duties to be paid to the Federal Inland Revenue Service (FIRS), among other fees.
The Accounting Committee of the Nigeria Insurers Association (NIA) that did the costing of individual insurance companies’ recapitalisation expenses put the total amount at N77 billion for the 58 existing companies. Also noted is that companies offering composite business that requires N18 billion minimum capital are the worst hit, as some could have to cough out about N5 billion each to raise the N18 billion.
Although, the National Insurance Commission (NAICOM) had pledged to discuss palliatives with its counterpart agencies, the Securities and Exchange Commission, NSE, and FIRS, no commitment has, so far been made by any of them.
For instance, at the Insurance Sector Forum organised by the Nigerian Stock Exchange in Lagos recently, the SEC had recently denied the claim by NAICOM that a letter requesting for financial palliatives and waivers has been submitted to the Commission.
According to, Head of Department, Securities and Investment, Mr Abdulkadir Abbass who represented Mrs Mary Uduk, the Ag DG of SEC, the Commission had not received any request for waiver on recapitalisation or palliatives from the NAICOM.
But Mr Pius Agboola, Director, who represented , the Acting Commissioner for Insurance, NAICOM, Mr Sunday Thomas during the question and answer session, had said that his commission had already submitted a letter to that effect to SEC.
Mr Agboola had, however, admitted that the letter was given to Mr Abbass’ driver for onwards delivery to the Commission and whether the letter was submitted or not was unknown.
He pledged to resend a fresh letter to SEC for them to step up action.
However, , Director General, NSE, Mr Oscar Onyema at the Forum themed; Recapitalisation: A panacea for Insurance Industry Growth” had called for support of the insurance industry’s stakeholders for companies seeking to raise capital in the market, adding that insurance needs support to realise its potentials.