A major restructuring of the insurance industry is imminent with yesterday’s passage of a bill by the Senate to amend the laws and refocus the sub-sector in line with current realities.
The bill, passed by the Red Chamber after considering the report of the Committee on Banking, Insurance and Other Financial Institutions, upgrades the minimum capital for re-insurance firms to a minimum of N35 billion.
Apart from re-insurance, the proposal known as the 2024 Nigerian Insurance Industry Reform Bill, puts non-life insurance capital base at N15 billion and life assurance at N10 billion. The current minimum capital limits of the three classes are N10 billion for re-insurance firms, N2 billion for life and N3 billion for non-life insurance organisations.
Many of the 67 companies might be unable to raise the funds, creating the possibility of mergers, acquisitions and outright extinction of some firms. Managing Director/CEO of Stanbic IBTC Insurance AkinJide Orimolade confirmed last night that the N15 billion proposed capital base for non-life business would likely result in merger and acquisition. Another CEO, who spoke on condition of anonymity because “I don’t know the content of the Bill yet” said he feared job losses.
He said on the flip side, it could lead to an inflow of foreign capital to acquire some of the companies.
According to him, in this instance, there will be prospects in the industry.The sector’s regulator, the National Insurance Commission (NAICOM), yesterday declined to speak on the Bill.
An official said: “It is premature to comment on it or speak about its likely implication because the House of Representatives has not passed the bill, let alone the President signing it.”
Chairman Senate Committee on Banking, Insurance and Other Financial Institutions Adetokunbo Abiru, during plenary yesterday, presented the report on the proposed law on the floor.
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