Lagos: The National Insurance Commission (NAICOM) has announced that the Nigerian Agricultural Insurance Corporation (NAIC) will continue its mandate to underwrite agricultural insurance schemes, even after the revocation of its general insurance licence. This announcement was made by Mr. Olusegun Omosehin, Commissioner for Insurance and Chief Executive Officer of NAICOM, during a media interactive session on developments within the Nigerian insurance sector.
According to News Agency of Nigeria, Omosehin clarified that the withdrawal only pertained to the general insurance licence that had been previously granted to NAIC to cover other classes of insurance. He emphasized that NAIC was established through legislation specifically to provide agricultural insurance and that the legal framework supporting the corporation remains intact. The Federal Government is committed to supporting the corporation by providing additional funding when necessary to ensure the effective management of its agricultural insurance schemes.
Omosehin reassured stakeholders that the withdrawal of the general insurance licence will not create a gap in the insurance market, as other licensed insurers have the ability to cover general insurance needs. NAIC will continue its specialized focus on agricultural insurance, while commercial insurers are expected to offer additional capacity for risks previously handled by the corporation.
Addressing the broader implications of the recapitalisation exercise on underwriting capacity, Omosehin noted that increased capital would enhance insurers’ ability to retain more risks domestically, reducing dependence on foreign reinsurance. He explained that an insurer’s retention capacity is directly linked to its capital base and reinsurance capabilities.
The commissioner revealed that during the recapitalisation exercise, only two insurance companies opted to relinquish specific licences after assessing their business strategies and capital-raising potential. NSIA Insurance, which was formerly a composite insurer, surrendered its life insurance licence, transferring its life insurance portfolio to CHI Life, with the process progressing significantly under NAICOM’s oversight. Similarly, Alliance and General Insurance also decided to drop its life insurance licence, with NAICOM closely monitoring the portfolio transfer process.
Omosehin highlighted NAICOM’s openness to considering applications for new licences from investors with credible business propositions that address gaps in the insurance market. He emphasized the importance of prospective investors demonstrating how their businesses could enhance insurance penetration and add value to the existing market.
On the revocation of Universal Insurance’s licence, Omosehin expressed dissatisfaction with the company’s failure to meet the minimum capital requirement or provide evidence of capital raising efforts by the deadline. Despite a request for an extension submitted after the statutory deadline, NAICOM could not accommodate the request due to legal constraints. Omosehin assured Universal Insurance policyholders of their priority in the settlement of the company’s liabilities, emphasizing a transparent liquidation process under regulatory supervision.