By Ngozi Onyeakusi– The National Insurance Commision (NAICOM) today said that verification of capital raised in the ongoing recapitalisation will commence on September 21, 2020.

This was disclosed by the Director, Policy and Regulations, NAICOM, Pius Agboola, in a circular, he signed for the Commissioner for Insurance, Sunday Thomas, entitled: Re: Minimum Paid Up Share Capital Policy for Insurance and Reinsurance Companies in Nigeria.

According to him, the circular is in furtherance to the commission’s earlier circulars referenced NAICOM/DPR/CIR/25/2019
dated May 20, 2019, July 23, 2019 and December 30,2019 respectively on the subject matter.

Agboola pointed out that the minimum paid-up share capital shall be through any or a combination of either and existing paid-up share capital, cash payment for new shares, retained earnings – capitalisation of undistributed profits.

He listed also payment in kind, such as properties, T-Bills, Shares, Bonds, share premium among others for new shares issued which must be converted to cash not later than three months to the recapitalisation
deadline.

According to him, the above components are to be converted to paid-up share capital in compliance with the recapitalisation exercise and applicable laws and regulations in Nigeria.

“For Private Placement, appropriate clarification have been obtained from the relevant regulatory agency to the effect that insurance and reinsurance companies may offer more than 30 per cent of the existing issued and fully paid shares.

“Submission of recapitalisation progress report shall now be monthly and the report shall be submitted not later than five working days after the end of each month, effective end of August ,” he said.

Agboola stated that timeline and activities for the first phase of the recapitalisation have been scheduled to commence on Aug. 30 for submission of monthly recapitalisation progress report.

He said completion of the submitted reports would be after five working days after the end of each month.

The Commision’s director noted that all mergers for the purpose of meeting the first phase of November 30, 2020 recapitalisation would commence on Sept. 14 and shall be irreversible except with a written approval of the commission.

According to him, NAICOM shall commence capital verification on September 21 while communication of capital verification report to respective companies shall begin on Nov. 30 and end Jan. 21,2021

” Deadline for compliance with the first phase of the new minimum
paid-up capital by all existing companies remains Dec.31 and issuance of letters of compliance as at date is Feb. 26, 2021,” he posited.