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14 insurance firms shut
KELVIN EGERUE,
insurance Editor
Government will this morning unsettle
the finance sector as it orders the closure of 14 insurance companies for
failing to recapitalise their operations.
On the list of the firms ordered shut are four state owned
companies.
The government in handing down the order,
has appointed liquidators to preside over the management of the assets and
liabilities of the firms. The liquidation will commence this morning.
The revocation order followed agitations
for another round of fresh fund injection into the operations of insurance firms
in the manner that will bridge the gap between the working capitals of the banks
and the insurance companies. The banks are currently grappling with fulfilling
the N25 billion minimum capital requirement while the insurance subsector has a
prevailing minimum capitalisation of N350 million.
The N350 million minimum was prescribed by
the Insurance Act 2003 with companies allowed nine months to comply. The period
expired last March with the National Insurance Commission (NAICOM) announcing a
list of 104 insurance and reinsurance firms as embracing the tape.
The Chief Dipo Bailey-led NAICOM took the
market by storm this morning, sealing off 14 insurance firms and throwing their
various chief executives and staff into the labour market.
The shut firms are Accelerated Insurance
Company Limited, Altimate Trust Insurance, Amicable Assurance Plc, Financial
Assurance, Fortress Insurance and Gateway Insurance Companies owned by Kogi and
Kwara states.
The list includes the Imo State owned Lake
Insurance, the Chief J. Akin George owned Marine and General Insurance, New Era
Insurance of Anambra State, Security Assurance Plc, Stallion Assurance, Triumph
Assurance, Unity, Life and Fire Insurance and the last, the Kano State-owned Val
Insurance Company.
"The general public is hereby advised not
to transact any insurance business with the listed companies as from this date
and not to deal with any assets and properties of the listed companies," the
revocation order read in part.
It would be recalled that the Commissioner
for Insurance, Chief Bailey had last March put the 14 companies on notice of the
commission’s intent to cancel their licences even as he gave a 30 day period of
grace for those which would want to appeal against the move. Security Assurance
Plc and Amicable Assurance were among the ones that appealed for a stay of
execution.
Section 9(3) of the new Insurance Act had
stated that failure on the part of any insurance company to recapitalise to the
new minimum level shall constitute a ground for the cancellation of their
operating certificates.
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