Wednesday, July 24, 2019 / 11:48AM / By NAICOM / Header Image Credit: Nepean Brokers
CIRCULAR NO: NAICOM/DPR/CIR/25 - 01/2019
RE: MINIMUM PAID UP SHARE CAPITAL POLICY FOR INSURANCE AND REINSURANCE COMPANIES IN NIGERIA i.e Nigeria: New Minimum Paid-Up Share Capital Policy For Insurance And Reinsurance Firms
In furtherance to our Circular referenced NAICOM/ DPR/CIR/25/2019 dated May 20, 2019 on the above subject, the following shall apply to existing Companies.
1.0 Share Capital
1.1 The minimum paid up share capital shall be through any or a combination of the following:
(a) Existing paid up share capital;
(b) Cash Payment for new shares Issued;
(c) Retained Earnings -- Capitalization of undistributed profits;
(d) Payment in kind (other than by way of cash) for new shares Issued such as properties, T-Bills, shares, Bonds which must be converted to cash not later than three (3) months to the deadline for recapitalization; and
(e) Share premium.
1.2 Item a (i-v) above can be achieved through Merger and Acquisition.
2.0 Escrow Account with CBN
Cash payment for new shares issued shall be deposited in an escrow account with the CBN. Deposited funds shall be released not later than 30 days after the confirmation and issuance of a new license.
3.0 Shareholder’s Fund
The shareholder’s fund as at the last date of recapitalization for existing Insurance/ Reinsurance Companies shall be less than the required Minimum Paid up Share Capital.
4.0 Statutory Deposit
Payment of Statutory Deposit shall be in accordance with the Insurance Act 2003 and shall be made not later than 30 days to the deadline for the recapitalization.
5.0 Mergers & Acquisitions
All Mergers & acquisitions shall be concluded not later than 60 days to the deadline for the recapitalization
Director, Policy & Regulation Directorate, National Insurance Commission of Nigeria.
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