Against the report by a national daily (not LEADERSHIP) that solvency ratio of five, out of 12 Nigerian insurers companies have fallen below regulatory threshold, the National Insurance Commission (NAICOM) has described the report as false and misleading.
According to the refuted report, the five insurers whose solvency ratio are below the threshold are Aiico Insurance Nigeria Plc with solvency ratio of 55 per cent, First Bank Insurance Plc who ratio is said to be at 59.10, per cent, Lead way Assurance Limited: 76 per cent, NEM Insurance Plc, 93 per cent and Continental Nigeria Plc which the report also said currently stands 90 per cent.
The report noted that any insurance firm whose insolvency ratio is below the minimum level automatically lose the ability to settle all claims from its clints in an extreme situation.
In a statement titled: “Re: Solvency ratio of 5 Insurers fall below regulatory threshold,” signed by its Deputy Director/Head, Corporate Affairs, Rasaaq ‘Salami said while not holding brief for any company, “NAICOM, being the apex Regulatory and Supervisory body of the insurance sector in Nigeria do hereby refutes this claim in its entirety.”
Salami said the five companies mentioned in the publication are financially strong and solvent. “With the benefit of hindsight, the report is not only false but misleading as the stated solvency ratios are at variance with the true position,” he said.
Section 24(2) of the Insurance Act 2003 stipulates that the solvency margin of an Insurer shall not be less than 15 per centum of the gross premium income less reinsurance premiums paid out during the year under review or the minimum paid up capital whichever is greater.
“Suffice it to say that the solvency test of the financials of insurance companies in Nigeria is based on the provision of extant laws. The Commission reiterates that members of the press should always explore all avenues to verify their facts before going to bed to avoid misleading the public,” the statement added.
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