Justice C. J. Aneke of the Lagos Division of the Federal High Court has restrained the National Insurance Commission (NAICOM) from taking any further steps in implementing its deadline date for insurance and reinsurance companies to recapitalise.
Justice Aneke made the order on December 21 while delivering ruling in an ex-parte application brought before the court by the Incorporated Trustees of the Pragmatic Shareholders’ Association of Nigeria.
The motion, marked FHC/L/CS/1797/2020 and filed on December 15, 2020, was moved on behalf of the group by their lawyer, I.C. Ifedora.
The applicant prayed the court for an order of interim injunction restraining the defendant and its agents from taking further steps in the recapitalisation process in the insurance industry pending the hearing and determination of its motion on notice before the court.
NAICOM, in a circular in May 2019, had called for increase in the minimum paid-up capital for insurance and reinsurance companies.
According to the circular, life insurance firms are required to meet a minimum paid-up capital of N8 billion, from the previous N2 billion, while general insurance companies are required to raise their minimum paid-up capital to N10 billion from N3 billion.
NAICOM also raised the regulatory capital for composite insurance from N5 billion to N18 billion, while it increased the minimum capital of reinsurance businesses from N10 billion to N20 billion.
The firms are, however, directed to comply with the new directive not later than December 31, 2020 and September 30, 2021 respectively.
But the plaintiff had approached the court to seek redress.
They asked the court to also restrain NAICOM from taking further steps or issuing further directives or circulars in a bid to enforce the December 31, 2020 and September 30, 2021 deadlines, or imposing any restrictions on the business of any insurance or reinsurance company for the purpose of enforcing NAICOM’s circular or directives on the recapitalisation, pending the hearing and determination of motion for interlocutory injunction filed in the suit.