Nigeria increased the minimum capital requirement for insurers by threefold, in a bid to expand their capacity to handle risk in Africa’s biggest oil producer.
The National Insurance Commission requires the new levels of capital by Jan. 1, according to Rasaaq Salami, spokesman for the Abuja-based regulator. Insurers that want “limited deals or don’t want to take all the risks in their class of business do not need to raise capital,” he said by phone.
Life insurers wanting to take on annuity and group life are required to boost their capital to 6 billion naira ($16.6 million) from 2 billion naira, while non-life operators underwriting all risks including aviation and engineering should shore up their capital to 9 billion naira from 3 billion naira, according to Salami.
Regulators in Africa’s most-populous nation said last year they’d ensure companies aren’t signing up more business than they can handle, so that the industry reduces its risk exposure and boosts liquidity and profitability.
Companies that want to do both life and non-life business, including oil and gas deals, should increase capital to 15 billion naira from 5 billion naira, Salami said.