The National Insurance Commission (NIC) has given a strong indication to revoke licenses of insurance firms that fail to recapitalise by 31st of December this year.
The companies have less than six months to meet the new requirement of ¢50 million which is expected to put them in good standing to be able to underwrite big ticket risks.
Speaking to Joy Business, Commissioner of Insurance, Dr. Justice Yaw Ofori said an appreciable number of insurance companies would be able to meet the new requirement following a final assessment of their books.
“Most of them have brought in their work plan on how they are going to actually achieve the ¢50 million requirement. So is in progress, by the end of the third quarter, we will actually have a clear figure of those companies that might be able to meet the requirement”, he pointed out.
In terms of assessment of the books of insurers, Dr. Ofori said “what I will say is that most of them [insurers] are doing all they can to improve their capital requirement. Definitely some will face challenges, but majority of them are doing whatever they can to meet the minimum capital requirement”.
He was firm that “after 31st December, if you do not meet the minimum capital requirement, then you cannot operate.”
Underwriters given 6-months extension to recapitalise in January 2021
The insurance firms were given up till January 1st, 2022 to boost their capital bases
Initially the deadline was expected to be end of June 2021 but the insurers complained that the coronavirus pandemic disrupted their plans.
The insurance regulator therefore accordingly granted the firms an extension till the end of 2021.
In June 2019 51 life and non-life insurers were given two years to increase their minimum capital by more than a third to ¢50 million cedis ($8.5 million).
¢The minimum amount for reinsurers was also raised to ¢125 million from ¢40 million.