NIC’s try and collapse insurance coverage corporations ineffective, retrogressive – Wiredu,

An Insurance coverage Marketer has described as “ineffective, pointless and retrogressive” makes an attempt by the Nationwide Insurance coverage Fee (NIC) to break down some insurance coverage corporations over their failure to satisfy the GH¢50 million recapitalisation directive.

The NIC is on the verge of withdrawing the licences of some insurance coverage corporations after they have been unable to recapitalise to GH¢50 million by the tip of its recapitalisation deadline.

By not assembly the brand new capital requirement, the insurance coverage sector regulator mentioned the businesses had additionally failed to maneuver their capital adequacy ratio (MCR) to 150%, as required by an earlier directive.

It has, subsequently, given the affected corporations as much as 6 February 2022 to cough up the funds or shut store and hand over their operations.

The warning that was communicated to the affected corporations on 6 January 2022 now dangers triggering the collapse of corporations, mass layoffs, lack of investments and disruptions in a monetary sector that’s recovering from the latest clean-up train.

However talking on the Morning Starr on Thursday, Edgar Wiredu acknowledged the transfer by the NIC is totally pointless and can simply result in avoidable job losses.

“What the legislation requires of the regulator to do shouldn’t be what the regulator has performed. What it has performed is an arbitrary determination and it was based mostly on the truth that BOG raised the minimal capital requirement. Elevating the minimal capital is predicated on a sure formulation and also you haven’t performed that however you might be altering the legal guidelines out of your workplaces.”

“Minimal capital is meant to be liquid cash. That cash can’t be used for something. It may solely be touched with the approval of the regulator when there’s an emergency. Brokers performed don’t underwrite any insurance coverage, so why ought to they supply minimal capital…this determination by the NIC is completely ineffective and pointless. We have now to be progressive and never come out with directives which might be retrogressive.”

Mr Wiredu added that the 5 insurance coverage corporations which might be more likely to be collapsed will result in about 300 folks dropping their jobs.

The directive to insurance coverage corporations to recapitalise from GH¢15 million to GH¢50 million was issued in 2019 and meant to elapse in June 2021.

It was, nonetheless, shifted to the tip of January 2022, because of the affect of the COVID-19 pandemic on companies.