Post Views: 458 Directors of Lasaco Assurance Plc, on Monday announced plans for an extra-ordinary general meeting (EGM) on October 10, 2018 in Lagos,...
Directors of Lasaco Assurance Plc, on Monday announced plans for an extra-ordinary general meeting (EGM) on October 10, 2018 in Lagos, primarily to seek the approval of shareholders for fresh capital injection that will enable it meet the capital base set by its regulator- the National Insurance Commission (NAICOM) with effect from January 2019.
A notice of the meeting, by Gertrude Olutekunbi, company secretary of Lasaco Assurance, says shareholders would approve an increased in its authorized share capital from 10bn to 50bn by creating additional 40bn ordinary shares of 50 kobo each.
The new shares so created are to be offered, subject to relevant regulatory approvals, for raising additional capital by way of public offer, private placements, or preference shares and to determine the terms thereof.
NAICOM also introduced a three-tier based recapitalisation for the insurance industry, which requires composite insurance companies in the Tier 1 category to raise their capitalisation from N5bn to N15bn. Tier 1 companies interested life business are expected to jerk their capital from N2bn to N6bn; while non-life players willing to play in this tier must have N9bn capital, up from N3bn.
In the tier two category, composite insurers are required to recapitalized to N7.5bn; N4.5 billion, for non-life operators; and N3bn for life operators under Tier 2 category.
However, for tier-three, operators are expected to maintain the current N3bn capital base for non-line; N2bn for Life Insurance and N5bn for Composite insurers, in what is expected to ensure that operators have adequate capital to absorb the risks they are taking.
NAICOM said the recapitalization became necessary, considering the impact of rising inflation and increased interest rates over the last 10 years, while insurers have continued to operate with the same capitalization since 2007.
The initiative is also expected to enhance the soundness and profitability of insurers through optimal capitalization, the commissioner added that the introduction of proportionate capital that supports the nature, scale and complexity of the business conducted by insurers is necessary.