The Senate Tuesday passed for third reading, a bill seeking to increase the capital base of risk-based insurance companies.
It, however, reduced the figures earlier proposed in the bill.
The decision followed the consideration and adoption of the recommendations of the report of a bill for an act to repeal the Insurance Act, CAP. 127 laws of the Federal Republic of Nigeria 2004; the Marine Insurance Act, 2004; the National Insurance Corporation of Nigeria Act ,2004; the Nigeria Reinsurance Corporation Act, 2004, and enact the Nigeria Insurance Industry Reform Act, 2024, to provide for a comprehensive legal and regulatory framework for insurance business in Nigeria and for related matters during plenary.
The previous provision of the bill pegged the minimum capital requirement for non-life insurance business at N25 billion, life assurance business at higher than N15 billion and reinsurance, N45 billion.
In the report by the Senate Committee on Banking, Insurance and other Financial Institutions chaired by Sen. Mikhail Adetokunbo Abiru (APC Lagos East), the Senate stated that “a person shall not carry on insurance business in Nigeria unless the insurer has and maintains, while carrying on that business, a minimum capital, in the case of (i) N15, 000, 000, 000. 00 (N15 billion) or (ii) risk based capital determined by the commission.
Life assurance business, the higher of (i) N10, 000, 000, 000, 00 (N10 billion), or (ii) risk based capital determined by the commission.
(C) reinsurance business, the higher of (i) N35, 000, 000, 000.00 (N35 billion), and (ii) risk-based capital determined by the commission.
The Senate added that in determining the risk based capital required, “the commission shall take into consideration the capital for insurance risk, market risk and operational risk, and apply such capital changes on assets and liabilities as shall be determined from time to time.”
