National Insurance Commission has issued a new order from its command and control room where “minimum paid up share capital policy for insurance and reinsurance companies in Nigeria” rules are marshalled, that the submission of recapitalisation progress report shall now be monthly.
This new directive which rests on three earlier circulars on minimum paid up share policy, by the Director (Policy & Regulation), Pius Agboola, demands that; “the report shall be submitted not later than five working days after the end of each month, effective end of August, 2020.”
The new directive reiterated earlier policies that the minimum paid up share capital shall be through any or a combination of the following: existing paid-up share capital; cash payment for new shares; retained earnings – capitalisation of undistributed profits; and payment in kind (such as properties, T-bills, shares, bonds etc) for new shares issued – which must be converted to cash not later than three months to the recapitalisation deadline; and also share premium.
In the timeline for compliance with minimum paid – up share capital , (phase 1 ending 31st December, 2020), which kicks off August 31st, NAICOM said that by September 14th , all mergers for the purpose of meeting the first phase of recapitalisation shall be irreversible except with a written approval of the Commission and shall be completed by November 30, 2020.
The Commission also stated that September 21, marks commencement of capital verification and terminates January 29, 2021; following that by November 30, shall be communication of capital verification report to respective companies and shall also be rapped up January 29, 2021.
This phase exercise ends December 3,2020, and issuance of letters of compliance has been scheduled for February 26, 2021.