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HomeTop NewsMany insurance firms struggling to pay claims, offer assets for sales ~NAICOM

Many insurance firms struggling to pay claims, offer assets for sales ~NAICOM

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The National Insurance Commission (NAICOM) said many insurance companies are selling their assets to enable them to settle claims and other liabilities at the instance of the commission.

According to the Commissioner for Insurance, Sunday Thomas, there were expectations that the commission will revoke the licences of non-performing insurance companies, especially those that are not able to meet their obligations.

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.

The commissioner said NAICOM would decide on actions to take against the weak companies in the sector that were not meeting their obligations after the ongoing recapitalisation exercise.

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.

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“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 at. 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.

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