By: Fred Yaw Sarpong
A commercial court in Accra with recommendation from the National Insurance Commission (NIC) has appointed a liquidator to value all the assets of the Industrial and General Insurance (IGI) Ghana.
Daily Express gathered that the company was in financial difficulties and it was difficult to settle and pay claims, so the regulator decided to close it down. This means that NIC is closing down both the General and Life insurance of IGI.
The Deputy Commissioner of NIC, Mr Simon Davor told Daily Express at a seminar in Accra that the commission asked the board and the management of the company to inject additional capital which it would have revive it after NIC realized the company was in difficulties, but they refused.
‘‘We realize that the policy holders interest were not been protected so we fall on the powers conferred on us by the insurance law to assist them to leave the market,’’ he further stated.
‘‘The court then appointed liquidator which will go through the last leg of disposing of the company’s property. The liquidator is to assess the company properties and sell the assets of the company and sort out any financials owe the company.
He said the NIC is mandated under the Insurance Act 2006 (Act 724) to ensure effective administration, supervision, regulation, monitoring and control of the business of insurance to protect the insurance industry and policyholders.
Hopefully by the end of the second quarter of this year the liquidator will have finished the work.
The IGI is a Nigerian insurance firm focused on oil and energy, engineering aviation and among others. In 2008 IGI Nigeria acquired 60% majority stakes in Network Assurance in Ghana. The remaining 40% was been held by the Ghanaian firm.
The Daily Express checks at the NIC revealed that after IGI entered into the country, the company invested some of his capital by acquiring some shares in SIC Insurance Company.
The national regulator has said that most of the policyholders on IGI General products have expired. However, those policyholders on IGI Life will be transfer to any other Life Insurance company in the country after the process has been completed.
Meanwhile, the NIC is increasing the minimum capital requirement of insurance companies in the country from GHc5 million to GHc15 million.
‘‘We are saying that the capitalization of the insurance industry is too low which is making it difficult for them to underwrite reasonable level of business in the country,’’ said Mr. Davor.
Mr. Davor said because the industry capitalization is too low most of the businesses which have to be retained in Ghana have to be compulsory insured outside the country.
He indicated that by way of improving the capitalization of the capacity of the insurance companies, the insurance industry through the Ministry of Finance decided to increase the minimum capital from GHc5 million to GHc15 million and that directive has been issued to the players.
‘‘‘By 31, December 2015 every insurance company in the country should have not less than GHc15 million,’’ he stated.
‘‘What we are envisaging is that those Ghanaian companies who will not be able to meet the new minimum requirement there should be a way of them pulling resources together by merging some of them. Those who will look for additional capital should do so but our hope is that two or three of them may decide to come together to become a stronger company,’’ said Mr. Davor