NAICOM yet to decide on N200 billion insurance funds in CBN’s escrow account

NAICOM spokesman Michael Umeh told the News Agency of Nigeria in Lagos that the regulatory body could not have taken a decision on the funds because a court injunction had stopped the recapitalisation exercise.

While describing the development as unfortunate and beyond NAICOM, Umeh said the commission would meet soon and the outcome communicated to all stakeholders.

He also said since the court was going to sit further on the matter, it would consider the interest of the industry and ensure that justice prevailed.

A federal high court in Abuja had on October 3 granted an interim injunction restraining the Federal Government from taking further action on the recapitalisation and consolidation of the insurance sector.

The court gave the ruling in a motion jointly filed by the Nigeria Reinsurance Corporation (Nigeria Re) and NICON Insurance plc (NICON).

The plaintiffs had argued that implementing the report of a presidential technical committee would adversely affect their operations.

They claimed that the Insurance Act, section 9(4) empowers only NAICOM to carry out the recapitalisation of the insurance sector and that the steps taken by the Federal Government were unconstitutional.

The first recapitalisation in the sector ended on February 28 and about 61 insurance companies and two reinsurance firms were recertified.

However, following the crisis that followed the exercise, which led to the removal of the then commissioner for insurance, a technical committee was set up by the Federal Government to review the exercise.

Meanwhile, operators in the sector have expressed concern that the recent court action would further deepen the confusion that had characterised the prolonged recapitalisation in the sector.

They urged the new NAICOM commissioner, Fola Daniels, to prevail on the CBN to release the funds to those companies that published their quarterly results as stipulated by the Securities and Exchange Commission and the Nigerian Stock Exchange.