The Nigerian Insurers Association (NIA), has expressed a sigh of relieve that the clog in the definition of capital for insurance and reinsurance companies which had placed the operators and National Insurance Commission (NAICOM) in hitherto different camps has been dislodged by the Finance Act 2021. The optimism of the NIA chairman, Ganiyu Musa flew high that a major milestone was achieved by the removal of the major encumbrance in the recapitalisation exercise.
Expressing his delight, Musa while addressing the ultimate press briefing in his two year tenure today at the Insurers House Victoria Island, Lagos, said the restrictive definition of the regulator did not reflect international best practice and it was now gone with the wind.
His elation that the operators and NAICOM now stand on same platform was expressed in fair term, “We are delighted to report that with the President’s assent to the Finance Act 2021, we now have a more acceptable definition of capital. Prior to this time, the definition of capital in Insurance Act 2003 was defective and highly restrictive.
“We appreciate the Hon Minister of Finance, Budget and National Planning, Commissioner for Insurance, KPMG and members of our Association for their support in seeing this process through. We are optimistic that this major milestone achievement has removed encumbrance on the recapitalisation exercise,” he added.
Recalling how the issue of capital definition was sorted, Musa said that new capital levels was already integrated into the 10 year blueprint of the association as one of the pillars in terms of strengthening the operators. “But where we had divergence was how it was to be done.” According to him, NIA wanted the global best practice and this he remarked, had birthed in several sectors of the Nigeria economy where global definition of capital had applied and were taken aback when NAICOM kept firmly to another route until good judgement prevailed.
However, when good judgement strolled in, both NAICOM and NIA agreed “to work together to get that resolved… We recognised that capital was a central issue. We took it out and worked with NAICOM and presented it and got it amended or repealed by the Finance Act 2021.”
“The Finance Act 2021 has now given an acceptable definition of capital. That was a big one for us as an Association. Now, we are waiting for NAICOM to come up with the revised guidelines in line with the provisions of the Finance act,” he stated.
Elated that the encumbrance has been taken out of the way, Musa said, “For us as an Association there is no other impediment now in proceeding with the recapitalisation.”
Still on legislation improvement, Musa said NIA is still committed to the comprehensive review of the Insurance Bill currently in the National Assembly and going through reconciliation between the executive and legislative branches. “Our expectation is that it is completed before the legislative term ends. Though it appears the attention of the National Assembly has shifted to election, but we are still working actively to see that we have brand new insurance act,” on this he rests.
Also, Musa said the interface with government has continued to scale up and this was with a view to creating more understanding of the importance and role of insurance in the national economy.
“The leadership of the Association has been engaging representatives of Federal Ministry of Finance, Budget And National Planning, the office of the Head of Service and the Accountant General’s Office on the issue of provision of appropriate data and payment of premium on Insurance of government assets. Several meetings have been held with a view to resolving the data funding challenges. We are optimistic that all the areas of concern will be resolved as quickly as possible so that insurance companies can perform their statutory obligations in that regard,” he stated