ASSBIFI seeks one year extension for insurance recapitalisation

The Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), has asked the National Insurance Commission (NAICOM), for one year extension for implementation on the tier-based solvency capital for underwriters to ensure total compliance among companies.The financial union, which posited that it was not against restructuring of the insurance industry, argued that extending the period of enforcement will also to allow for genuine consultation with appropriate stakeholders.

The National President of ASSBIFI, Oyinkan Olasanoye, at a news conference, said NAICOM’s position that under the new policy the insurance companies do not need to inject new capital is not realistic, noting that all operators should be given equal opportunity and enough time to determine the tier they wished to operate.
She appealed that NAICOM should rather do more in the area of enforcement of existing policies on compulsory insurance, to enable the sector contribute more
appropriately to the national gross domestic product (GDP).

“The process where you expect a firm to move from N5 billion to N15 billion just within 33 working days; August 25 to October 1, 2018, with the recession in Nigeria, and election year approaching, whereby investors are looking at the risks associated with elections, it is not something we believe is achievable.

“We are not against recapitalisation, but they should be given a fair play and opportunity, even if they would not need money to be recapitalised; there may be mergers, there may be association and private placement. All these that could take place during NAICOM’s grace period may not be feasible within 33 working days.”

Similarly, on the Central Bank of Nigeria’s (CBN) directive to the Assets Management Corporation of Nigeria (AMCON), to begin the process of sale of Polaris Bank, Olasanoye called for transparent and credible investors to be considered.She advised that only healthy financial institutions with very clean balance sheet that would add great value to the bank should be made to participate in the exercise, and the best among them made to pay.She added that AMCON must be allowed to undertake the sale without undue interference from greedy patrons, and ensure that the exercise does not go the way of Mainstreet Bank, which was clandestinely sold to the defunct Skye Bank.