The Commissioner for Insurance, Mr Sunday Thomas, has said that it is ensuring that defaulting insurance companies pay all their outstanding claims.
Thomas said that some of the defaulting insurance companies with huge liabilities and unable to meet up with their claims obligations had already put up their assets for sale to comply with NAICOM’s order to pay their claims.
The commission noted that there were expectations that it should revoke the licences of non-performing insurance companies. He added that this was not the best decision to take as of now.
Thomas said the commission was not keen on closing the defaulting companies now because they still had the potential to pay all their claims.
According to him, after the recapitalisation in the sector, the commission would decide on actions to take against the weak companies in the sector that were not meeting their obligations.
He said that some of the defaulting companies that had already put up some of their assets for sale had not been able to get buyers.
“Probably the best we can do now is to see how much we can recover to pay what proportion of the liability, when the company still has the potential of coming back to pay all its liabilities,” he said.
Speaking on one of the companies with huge liabilities, he said, “The assets are enough to cover its liabilities but the structure of the assets is where the issues are.
“Most of their assets are in properties. We are also aware that some of the properties have been put on sale for the past two years, because we asked them to go and settle these claims. The properties are up for sale but the buyers are not forthcoming.
“However, this is why we are insisting that companies must bring cash into the company and not just come and say you have recapitalised.
“After the recapitalisation, can you meet your obligations? These were some of the things that we were looking. A couple of claims have been paid by these companies.”
He said the commission was placing claims defaulting underwriters and technically insolvent companies under observation.
Recently, the commission liquidated the operating licence of Unic Insurance Plc.
The commission had said that Unic had problems of liquidation and efforts to resolve them were being frustrated by the owners.
NAICOM had ordered the insurance companies to recapitalise, but the ongoing exercise had been slowed down as the regulated entities, through their shareholders, had continued to drag the commission to court.
