An Insurance Company Scheduled To Be Closed Down By End Of December 2017

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News reaching us suggest that, an insurance company currently operating in Ghana shall closed down by the end of December 2017.

For not being able to meet the current minimum capital requirement of ¢15 million, the National Insurance Commission (NIC) has no option, than to close down the company.

Earlier, three insurance companies was scheduled to be closed down for not reaching the minimum capital requirement, but it has been reduced to just one; implying the other two have worked out to meet the requirement.

The National Insurance Commission (NIC) justifies their intention as a way to keep only well capitalized firms in the business.

In an interview with JoyBusiness, the Commissioner of the NIC, Justice Yaw Ofori, disclosed that the process to shut down the company in question has already started. “We are now looking at how to deal with the existing customers by transferring them to another firm so that these policyholders’ interests are protected,” he explained.

Justice Yaw Ofori; Commissioner, National Insurance Commission

He added that it did everything within its power to save the company in question, because “it is not a pleasant action that any regulator wants to undertake.”

But, this intention has not won the hearts of some industry players. An insurance expert; Edgar Wiredu has challenged the regulator on its planned move.

According to him, the Commission has not got the “legal mandate” to carry out this action.

“The rules governing capitalisation is being misunderstood here, the fact that someone cannot meet a particular capitalisation the commission has set cannot be the basis for closing down that insurance company or revoking its license”.

He added that the Insurance Act, under section 69, spells out how to carry out some of these actions.

“You increase the capitalisation under risk-based and not just any increases,” he said.

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