LAGOS, May 21 (Xinhua) -- The Nigerian government on Tuesday announced the recapitalization of insurance and reinsurance companies in the country.
Salami Rasaaq, head of the National Insurance Commission (NAICOM), who made this known to Xinhua in a statement, said the minimum capital base for life insurance companies was increased from 2 billion nairas (about 5.5 million U.S. dollars) to 8 billion nairas while General Insurance was increased from 3 billion nairas to 10 billion nairas.
He said composite insurance was increased from 5 billion nairas to 18 billion nairas while reinsurance capital base was increased to 20 billion nairas from 10 billion nairas capital base.
Rasaaq said the new minimum paid-up share capital requirement shall take effect from the commencement date of the circular for new applications which is May 20.
The insurance industry witnessed its last recapitalization in 2005/2007, the NAICOM chief added.
He said in spite of the astronomical increase in the value of insured assets, consequent exposure to a higher level of insured liabilities and operating cost of insurers, the same capital continued to rule in the insurance industry.
The official said the commission exercised the power conferred on it by law to review the minimum capital base for the companies in the country.