The National Insurance Commission (NAICOM) has adopted a Tier-Based Minimum Solvency Capital (TBMSC) model that allows small underwriting firms to operate alongside the bigger ones in the market.
The new model which graduate operators according to their capabilities was adopted by the commission having taken into consideration the economic situation and the different level of financial capabilities of insurance companies in the country.
The new approach which becomes effective January 1, 2019 has been communicated to chief executives of insurance underwriting companies at an emergency meeting of the Insurance Committee in Lagos on Wednesday.
The TBMSC structure is a complimentary measure to the ongoing implementation of the Risk-Based Supervision (RBS) programme currently being implemented in the insurance market.
A similar idea was in 1997 canvassed by the Nigerian Insurers Association (NIA) under the chairmanship of Bolaji Banjo, the then NIA Chairman in the wake of the crisis that trailed that year re-capitalisation exercise that pit the insurers’ association against the commission.
Under the newly adopted model which has now separated the men from the boys, the market is graduated into three cadres and the players in the top bracket regarded as Tier-One are expected to shore up their capitalization to N15 billion representing 200 percent increase if they are to operate the composite form of business.
Such insurers will be allowed to handle individual life, health insurance, miscellaneous insurance and annuity for life and Non-Life comprising fire. Motor, general accident, Engineering, agriculture, miscellaneous insurance, Marine, Bonds Credit Guarantees & Suretyship, Oil and Gas (oil related projects, exploration and production) and Aviation.
Life insurance in this cadre has to jerk up its capitalisation from the current N2 to N6 billion and the Non-Life in this category will move from the current N3 billion to N9 billion.
The Director Supervision, NAICOM, Barineka Thompson, at a briefing after the meeting of the insurance committee said that composite companies in Tier 2 cadre are to look for N7.5 billion to operate within this bracket.
Such companies will under its Life branch underwrite individual life, health insurance, miscellaneous insurance and Group Life insurance.
The Non-Life insurance under the Tier 2 covers Fire, motor, general accident, Engineering, agriculture and miscellaneous, Marine, Bonds Credit Guarantee and Suretyship.
A life company that decided to play in the Tier 2 cadre is to grow its capitalisation to N3 billion while a Non-Life Underwriter that want to play in this cadre is to look for N4.5 billion.
The last group is the Tier 3 which currently is the capitalization in the industry.
Companies that lack the financial capability to grow their capitalization to the either of Tier 1 or Tier 2 are expected to continue play in this cadre according to Barineka Thompson who noted that the failure of some insurers to honour contractual commitments to the insured and other stakeholders as well as the need to save from extinction, the market which has suffered recession as well as the 2008 global financial crisis
This new model Specifies capital requirement for each Tier Levels, based on Risk classification for each Tiers but with no mandatory injection of fresh capital fund by insurers;
Also, the new model will witness no cancellation of licence of any operator but will subject them to solvency control levels;
Barineka also noted that the new approach to recapitalization specifies intervention levels; and specific actions to be taken by the
Commission and Operators on various level of impairment of the TBMSC; and also open up licensing window to interested investors at higher
FG pledges 5bn cubic feet of gas supply to domestic and export markets
The Federal Government has pledged 5 billion cubic feet of gas per day to domestic and export markets. The country’s Minister of Petroleum Resources (Gas) Ekperikpe Ekpo, made the pledge during his address at the just concluded West African Gas Pipeline (WAGP) Authority Committee of Ministers (COM) meeting in Cotonou, Benin Republic.
While speaking, Ekpo said that member countries like Benin, Togo, and Ghana will keep getting consistent gas supply from Nigeria to meet their domestic energy needs.
Ekpo made this pledge while talking about the Decade of Gas Initiative, which he said aims to develop and commercialise over 5 billion cubic feet per day (bcf/d) of gas for both domestic usage and export markets.
He also mentioned the Nigerian Gas Expansion Program (NGEP) as well as the Compressed Natural Gas (CNG) initiative which will take Nigeria from an oil-based economy to a gas-based economy.
He said, “The above initiatives will ensure a continuous supply of reliable gas to WAGP through the N-Gas Limited that has been the vehicle for commercializing the Eastern gas.”
To ensure a consistent and reliable supply of gas to the WAGP through N-Gas Limited, Ekpo reaffirmed the commitment to commercializing Eastern gas resources.
He pledged support for N-Gas Limited and other participants along the value chain, particularly the Nigerian Gas Infrastructure Company (NGIC), to address challenges within the Escravos Lagos Pipeline System (ELPS).
Ekpo also highlighted ongoing projects by NGIC aimed at resolving ELPS pressure issues.
These projects include linking gas resources from the eastern region with demand regions in the western and northern parts of Nigeria, as well as installing midline compressors to comprehensively tackle pressure challenges in the system.
He emphasised the Nigerian government’s commitment to fostering unity within the West African sub-region and ensuring energy stability through the West African gas pipeline system.
Ekpo highlighted Nigeria’s current focus on gas as a primary fuel source, emphasising ongoing initiatives aimed at maximizing the country’s vast natural gas resources.
Additionally, he underscored the significance of initiatives like the Presidential Compressed Natural Gas (CNG) program and the Nigerian Gas Expansion Programme (NGEP), designed to promote the transition from liquid fuels to gas for automobiles and other sectors. Ekpo recently convened a meeting involving NNPCL, NMDPRA, and Chevron to tackle the soaring prices of cooking gas.
With the Christmas holidays fast approaching, he stressed the urgency of finding solutions to alleviate the cost pressures and prevent hardship for Nigerians.
He emphasised that President Tinubu would appreciate Chevron’s efforts to boost local LPG production during the festive season to enhance supply.
Missing N43bn revenue: Reps threaten to hand over NCAA management to EFCC
The House of Representatives has threatened to hand over the management of Nigeria Civil Aviation Authority (NCAA) to the Economic and Financial Crimes Commission (EFCC) over alleged missing N43 billion revenue generated in 2022.
Chairman, House Committee on Finance, Rep. James Faleke issued the notice in Abuja, during the ongoing interactive session with revenue generating agencies.
The records provided by the Federal Airport Authority of Nigeria (FAAN) revealed that 16 million passengers were transported by local airlines in 2022.
It revealed that three million passengers were transported by international airlines.
It was gathered that N1.28 trillion was realised from tickets sold to international passengers, out of which N64 billion represented five per cent shared by the five regulatory agencies in 2022.
It was also confirmed that the ADR16 documents, managed by Nigeria Airspace Management Agency (NAMA), showed that total of 14,572,614 passengers were airlifted by local airlines in 2021.
From the documents submitted to the Committee, NCAA declared N12.7 billion revenue from the share of the gross revenue allotted to regulatory agencies in the industry.
The lawmaker, however, said the amount was below the computed gross revenue share received by NCAA worth N66 billion realised from both revenues accrued from local and international travels for 2022.
The breakdown of NCAA’s revenue share showed that N31 billion was realised from local passengers.
Also, N35.85 billion was realised from international flights for the period under review.
According to the records provided to the Committee, five percent of all tickets sold to local and international airlines were distributed among five regulatory agencies.
Breakdown of the sharing formula showed that 56 percent of the amount is for NCAA, 22 percent is for Nigerian Airspace Management Agency (NAMA).
Nine percent is for Nigerian Meteorological Agency (NiMET), seven percent is for Nigerian College of Aviation Technology (NCAT).
Meanwhile, six percent is for the Accident Investigation Bureau (AIB).
Faleke also alleged that the agency was having outstanding of N8 billion revenue undeclared from revenue accrued from international passengers for 2022.
In his response to various allegations, the NCAA representatives, Captain Ibrahim Dambazau and Abubakar Gachi explained that some local airlines were working for the agency.
They added that the affected airline operators were indebted to the NCAA.
Piqued by the undue controversies trailing the amount realised and under-remittance, Faleke requested for NCAA’s audited reports.
He also demanded comprehensive reports of the NCAA banks operated before transition to Treasury Single Account (TSA) from 2015 to Q1 of 2023.
The committee also requested for the list of all local airlines that were indebted to NCAA.
IMO: Oyetola holds bilateral talks with Saudi Arabia, Bangladesh, Brazil, Jamaica
…As Nigeria sets to sign MoU with Saudi Arabia
By Seun Ibiyemi
The Minister of Marine and Blue Economy, Adegboyega Oyetola, on Tuesday, continued bilateral discussions with ministers and representatives from the Kingdom of Saudi Arabia, Bangladesh, Brazil and Jamaica, expressing Nigeria’s government interest in learning from their knowledge and experiences.
This was revealed through his media aide, Ismail Omipidan, in a statement issued on Tuesday evening.
Recall that Oyetola, on Monday, held bilateral meetings with representatives of Greece, Qatar, and Mexico, on the sidelines of the ongoing 33rd General Assembly session of the International Maritime Organization, IMO, in London, United Kingdom.
During his meeting with the Brazilian Chief of the Navy’s General Staff, Adm José Augusto V. da Cunha de Menezes, the minister said Nigeria would want to learn from the operations of the Brazilian coast guards, as the ministry was desirous of setting up one so as to further secure the maritime space and the country’s waterways.
Oyetola further noted that: “We want to also focus on sectors such as Marine Renewable Energy, Marine Mining, Subsea Cabling and Piping, Marine Genetics, and Biotechnology, so as to grow the marine and blue economy.
“As we continue to expand and develop the activities of the sector, there will be a need to deepen security architecture within the maritime space. In this regard, we are considering setting up Coast Guards and we believe that they will complement the existing security architecture to further secure our maritime space.”
The Minister while expressing Nigeria’s desire to tap into technology to revolutionalise the maritime sector, further said “technology and innovation are vital for boosting Nigeria’s trade and investment prospects within the Marine and Blue Economy. Advanced marine technologies, including innovations in maritime logistics and smart logistics solutions, will significantly enhance the efficiency and sustainability of maritime transport and port operations, making Nigerian ports more competitive globally.”
Oyetola also met the newly elected Vice President of IMO, who is the Bangladesh High Commissioner to the UK, Saida Muna Tasneem and Saudi Arabia’s Saleh bin Nasser AIJasser, who is the minister in charge of the Ministry of Transport and Logistics Services of Saudi Arabia, Department of Economic and Social Affairs.
Both Saudi Arabia and Nigeria during the meeting agreed to sign a formal Memorandum of Understanding (MoU) to cement their corporations, collaboration and partnership in the maritime space.
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