At least three insurance companies risk having their licenses revoked, over their failure to meet the recapitalization requirement, by the National Insurance Commission [NIC].
The Commissioner of Insurance at the NIC, Lydia Lariba Bawa disclosed this, but would however not mention the names of the affected companies.
“Some will by all means be caught; by three or four will be caught in the web of not being able to meet the recapitalization. We have already given them heads up that we are going to revoke their licenses,” she stated.
Insurance companies have up to the end of this month to meet the new capital requirement of 15 and 40 million cedis for direct insurance and re-insurance companies respectively.
The NIC explains that the decision is to equip the insurance companies for larger insurance deals and develop the sector.
‘The essence of recapitalization is to build capacity since insurance companies have low capacity and cannot meet high risk contracts. As a result they are forced to re-insure taking the monies out of the economy,’ Mrs Lariba stated.
We also understand that about eight insurance companies out of a total of 51, are yet to meet the revised requirements by the industry regulator.
But Madam Lariba Bawa assures her outfit will continue engagements with such companies to bring them up to meet the required figure.
“At least some of them have taken steps. Some have brought in a little cap and they just have a little to make up. So in that case we are not going to be too strict and say that by 30th September you are supposed to inject 10million more but you brought in 8 million cedis, you are left with 2 million cedis so we are going to close your company,” the NIC boss assured.
Though the NIC views this as encouraging, it still contends of some challenges facing the objective of adjusting the minimum capital requirement of insurance companies.
Since the revision, two companies have announced a merger in order to meet the increased capital need.