Insurance consumers, especially oil majors, are seeking the transfer of their risks to insurance firms with N9 billion capital base. This is the requirement in the cancelled Tier Based Minimum Solvency Capital (TBMSC). But this is contrary to the reversed N3 billion capital base stipulated by the National Insurance Commission (PenCom).
Chartered Insurance Institute of Nigeria (CIIN) President, Mr Eddie Efekoha, who spoke at the workshop for insurance and pension reporters in Lagos at the weekend, said despite the cancellation of the TBMSC, most companies would still lose businesses they used to underwrite as policyholders were more aware of the need for an insurer to have adequate capital base to underwrite different kinds of risks.
Efekoha, who is also the Managing Director, Consolidated Hallmark Insurance Plc, said there is a particular transaction in Exxon Mobil for several years that never respected the N3 billion capitalisation, adding that operators whose capital were within this minimum were excluded from the business.
He said he was told of a broker, who said his client had informed him not to place risks with any underwriting firm with less than N9 billion as proposed in the cancelled TBMSC policy. Efekoha lamented that with such developments, it was immaterial whether the industry regulator withdraws the TBMSC policy, adding that the policy has opened the eyes of insurance consumers.
Source: The Nation