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Recapitalisation: NAICOM moves to stop ‘hot money’

By on October 7, 2011

The National Insurance Commission (NAICOM) has adopted measures to ensure that stolen funds are not used to recapitalise bank-owned insurance firms, the Commissioner for insurance, Fola Daniel, has said.

Daniel told The Nation that NAICOM would screen local and foreign funds invested in the firms to ensure they do not contravene the Money Laundering Act. He said the commission would also forestall developments where individuals with questionable funds hijack the firms.

Daniel said: “All investors will be screened no matter where they are coming from. Anyone bringing in capital would be screened to ensure the money is not derived from criminal activity, but brought to do business. The country has put in place a mechanism for sifting potential investors.”

He said NAICOM would ensure that every investment to be made in the insurance industry follow the stipulated rules in the Money Laundering Act, adding that the commission would certify that insurance companies affected by the divestment policy remain afloat and stronger in years ahead.

Daniel noted that following the Central Bank of Nigeria (CBN) directive that banks divest from insurance businesses, NAICOM proactively set up an eight-man Advisory Committee to work out the modalities of the divestment to ensure that the insurance companies’ interest and that of policy holders were not jeopardised after the divestment.

He said that the committee has submitted its report, which the commission is harmonising to ensure that the set objectives are met.

Director-General, Nigerian Insurers Association (NIA), Mr Sunday Thomas, also said the association is working hard to ensure that companies affected by the divestment come out from the exercise strong.

He said the association is showing serious concern on the issue as the progress of firms is for Noting that many investors are interested in the industry, he said there may not be room for mergers. He noted that many investors have made overtures to some companies and all that is left is for the owners of the firms to dispose their stakes.

The Assistant Director, Corporate Affairs, NAICOM, Mr Lucky Fiakpa, said the commission has given approval in principle to Guaranty Trust Assurance and Law Union and Rock to discuss with investors expressing interest in the companies.