IICC Lists Recapitalization Benefits
By Ngozi Onyeakusi — As the insurance industry is presently undergoing through recapitalization exercise, the Chairman of the Insurance Industry Consultative Council (IICC), Mr. Eddie Efekoha, has assured the exercise will bring adequate capital to the industry.
Efekoha gave the assurance at the 2019 IICC Media Retreat in Ijebu Ode.
He noted that some insurance firms over some years were unable pay dividend, adding that after the Recapitalization, companies can do so.
Speaking further, Efekoha, who is also the Chairman, Chartered Insurance Institute of Nigeria (CIIN) and Managing Director, Consolidated Hallmark Insurance Plc, applauded NAICOM for setting a new pace of recapitalization in the financial sector, he assured that operators will not go against the regulator because the consequences are too grievous.
He said shareholders seem not happy with the recapitalization requirement, but there is a limit at which operators can control other stakeholders like the shareholders and investors.
He said that while they cannot stop them from speaking their minds, whatever they have said do not represent the operators’/managers’ decision.
He said:“The wind of recapitalization is blowing. We recently heard that Ghana insurance industry has commenced recapitalization and the Central Bank of Nigeria (CBN) just last week also came up with its own plan. I think the NAICOM should be commended for setting the pace.
“I can assure you that as operators, we will not go against our regulator because the consequences of that are too grievous. However, there is a limit to which operators can control other stakeholders like the shareholders and investors. We cannot stop them from speaking their minds, but whatever they have said do not represent the operators’/managers’ decision.
“The reasons NAICOM gave for the recapitalization exercise are the same reasons CBN is giving which are the issues of exchange rate and capacity. If these are the main reasons for the recapitalization exercise, the truth of the matter is that the exchange rate that applied in 2005 to 2007 is not the same in 2018 and 2019. Secondly, if the exchange rate has changed, our ability to retain businesses has weakened. Should we enhance it? The answer is yes.”
In the same vein, the president, Institute of Loss Adjuster of Nigeria (ILAN), Alhaji Femi Hassan, said ILAN is excited about the recapitalization to take place.
“We are eagerly waiting for it to take place, because it will enable the operators to put some structures in place that will help to grow the industry. I know the operators want this recapitalisation to take place, but the investors who have put their money into the insurance companies are the ones kicking against it, but nevertheless, I am optimistic that in the long run, every party will see reason”, he added.