Businessday new minimum capital insurance

According to the Business Day, the new minimum capital requirement for insurance companies in Nigeria has been increased to N8 billion (approximately $20 million USD).

Here are the details:

• The National Insurance Commission (NAICOM) has announced a new minimum capital requirement of N8 billion for insurance companies in Nigeria.
• The new capital requirement is aimed at strengthening the insurance industry and improving its ability to meet the needs of policyholders.
• The increase in capital requirement is also expected to enhance the industry's capacity to absorb risks and provide adequate coverage to policyholders.
• The new capital requirement is effective from January 1, 2023, and insurance companies that fail to meet the new minimum capital requirement will be required to recapitalize or risk being shut down.
• The NAICOM has also introduced a new category of insurance companies, known as "Tier 2" companies, which will have a minimum capital requirement of N2 billion (approximately $5 million USD).
• The Tier 2 category is designed to provide a pathway for smaller insurance companies to grow and develop, while also ensuring that they meet minimum capital requirements.

It's worth noting that the new minimum capital requirement is part of the NAICOM's efforts to strengthen the insurance industry and improve its regulatory framework. The commission has also introduced other measures aimed at improving the industry's governance, risk management, and financial reporting.

Here are some key quotes from the Business Day article:

• "The new minimum capital requirement is aimed at ensuring that insurance companies have sufficient capital to meet their obligations to policyholders and to absorb risks."
• "The increase in capital requirement is expected to enhance the industry's capacity to provide adequate coverage to policyholders and to absorb risks."
• "The Tier 2 category is designed to provide a pathway for smaller insurance companies to grow and develop, while also ensuring that they meet minimum capital requirements."

Overall, the new minimum capital requirement is expected to have a significant impact on the insurance industry in Nigeria, and will likely lead to a more robust and resilient industry that is better equipped to meet the needs of policyholders.