The National Insurance Commission has increased the minimum capital requirement for insurance companies in the country from ¢15million to ¢50 million.
According to a statement from the NIC, insurance companies have up until June 30, 2021, to meet the new minimum capital requirement.
The minimum capital requirement for Reinsurance companies will increase from ¢40 million to ¢125 million.
Insurance Broking companies Loss Adjustors will also see its minimum capital increased from ¢300,000 to ¢500,000.
However, Reinsurance Broking companies’ minimum capital will see no increment and will remain at ¢1 million
“As part of ongoing efforts to stabilise, strengthen and enhance the capacity of the financial services sector to support socio-economic development, the National insurance Commission has revised the Minimum Capital Requirements of all insurance entities,” the statement said.
The statement signed by the Commissioner of Insurance, Justice Yaw Ofori added that “The new Minimum Capital Requirements for the insurance industry will help strengthen the balance sheets of regulated insurance entities, thereby enhancing their underwriting capacity.
“It will also make resources available for investment in essential technology and the development and distribution of appropriate products which will help increase insurance penetration.”
NIC said, increasing the minimum capital requirement is only one of a number of steps being taken by the NIC to develop a robust insurance industry.
Other steps include improving strengthening the regulatory framework, implementation of Risk-Based Supervision and solvency requirements, strengthening risk management and Corporate Governance structures and practices within the industry and thus improving the claims payment culture. Risk management is at the core of insurance.
The Commission has, therefore, urged insurance companies to ensure that they are adequately capitalized to bear the risks they underwrite.
Currently, there are 142 regulated insurance entities made up of 24 life insurance companies, 29 non-life insurance companies, 3 reinsurance companies and 85 insurance brokers and loss adjusters.
The total assets of the insurance sector as of 2018 is in excess of ¢6 billion and the total Gross Written Premium is about ¢3 billion.