The National Insurance Commission (NAICOM), has released fresh guidelines for the payment of minimum paid-up share capital by insurance and reinsurance companies in Nigeria.
The Director, Policy and Regulations, NAICOM, Pius Agboola, said the guidelines were in furtherance to the Commission’s earlier circulars dated May 20, 2019; July 23, 2019; and December 30, 2019, respectively, on the subject matter.
Agboola said the minimum paid-up share capital would be through any or a combination of either existing paid-up share capital, cash payment for new shares, retained earnings, or capitalisation of undistributed profits.
He also listed payments in kind, such as properties, T-Bills, shares, bonds, share premium among others for new shares issued, which he said must be converted into cash not later than three months to the recapitalisation deadline.
According to him, these components are to be converted to paid-up share capital in compliance with the recapitalisation exercise, and applicable laws and regulations in Nigeria.
The circular reads in part: “For Private Placement, appropriate clarification has 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.”
Agboola explained that the timeline and activities for the first phase of the recapitalisation had been scheduled to commence on August 30, for the submission of monthly recapitalisation progress report to be completed within five working days after the end of each month.
He added that NAICOM would commence capital verification on September 21, while communication of capital verification reports to respective companies would begin on November 30, and end January 21, 2021.
The circular said deadline for compliance with the first phase of the new minimum paid-up capital by all existing companies remains December 31, while issuance of letters of compliance would be February 26, 2021.