PInsurance companies in the country are to with a minimum of GH¢50million by June 30, 2021.
Reinsurance companies and Insurance Broking companies-Loss Adjustors are also to recapitalise with at least GH¢125 million and GH¢500,000 respectively, while that of Reinsurance Broking companies has been maintained at GH¢1 million.
This followed the revision of the Minimum Capital Requirements (MCR) of all insurance entities by the National Insurance Commission (NIC).
A statement signed and issued in Accra by the Commissioner of NIC, Justice Yaw Ofori, said the new MCR was in the meantime applicable to all new applicants and pending applications.
The new MCR for the insurance industry, he said, was to strengthen the balance sheets of regulated insurance entities, thereby enhancing their underwriting capacity and make resources available for investment in essential technology.
It said the move would also improve the development and distribution of appropriate products to increase insurance penetration.
In addition to the new MCR, the statement noted that the NIC was strengthening the regulatory framework, implementation of risk based supervision and solvency requirements, strengthening risk management and corporate governance structures and practices including claims payment culture within the industry.
It explained that, as an industry concerned with risk management, insurance entities were expected to be adequately capitalised to bear the risks they underwrite and have the capacity to accept risk.
To ensure that the capitalisation achieves its intended objectives, the statement said insurance and reinsurance companies are to meet the new MCR through cash injection, capitalisation of audited profits or a combination of the options.
However, injection of property, it stated, would be accepted, adding that any unencumbered property that would be introduced would have to be sold for cash six months before December 31, 2020.
The Commission would improve on its risk based solvency capital approach to ensure that in addition to the MCR, the capital of a firm was commensurate with the risks it bears, the statement noted.
It said the Commission settled on the 2021 deadline to allow existing entities enough time to comply with the revised MCRs with little disruption to their operations.
The statement urged stakeholders, directors and executives of all insurance companies to take all proactive steps to meet the new MCR by the set date.
The NIC, in 2017, commenced discussions with various stakeholders in the sector on the revision of the MCR.
Currently, there are about 142 regulated insurance entities comprising 24 life insurance companies, 29 non-life insurance companies, three reinsurance companies and 85 insurance brokers and loss adjusters with more than GH¢6 billion total assets.
BY TIMES REPORTER