NIC Commissioner spells out recapitalisation rules

Insurance commissioner, Justice Ofori has stated categorically that assets that are not registered in the name of insurance companies will not be considered and therefore not counted as part of the 50 million cedis new capitalization.

The Insurance Commission has given insurance companies up till 2021 to recapitalize as part of efforts to clean-up the insurance industry, a move that has sharply divided views within the insurance industry.

Speaking in an interview on TV3’s Business Focus Monday, the Insurance Commissioner said the idea of recapitalization is to ensure a stronger insurance market that is able to pay claims and take on bigger ticket transactions.

When asked about the structure of the 50 million cedis he said, “often for a new company, you should have 40 percent asset,60 percent liquid cash”.

The idea is to ensure that in worse case when there is a crisis the insurance company is able to sell the assets and pay off claims.

Mr. Ofori observed that “there have been instances when owners give assets to the company but on paper the asset is still in the name of the individual which is illegal.”

According to him, once the asset is not registered in the name of the company it will not be counted and the company will be deemed as insolvent.