Nigeria increased the minimum capital requirement for insurers by threefold, in a bid to expand their capacity to handle risk in Africa’s biggest oil producer.
The National Insurance Commission requires the new levels of capital by Jan. 1, according to Rasaaq Salami, spokesman for the Abuja-based regulator. Insurers that want “limited deals or don’t want to take all the risks in their class of business do not need to raise capital,” he said by phone.
Life insurers wanting to take on annuity and group life are required to boost their capital to 6 billion naira ($16.6 million) from 2 billion naira, while non-life operators underwriting all risks including aviation and engineering should shore up their capital to 9 billion naira from 3 billion naira, according to Salami.
Regulators in Africa’s most populous country said they were confident that last year the companies would not do more than they could handle, thereby reducing the risks to the industry and increasing liquidity and profitability.
Salami said that companies that want to do both life and non-life work, including oil and gas trading, should increase their capital from 5 billion to 15 billion.
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