National Insurance Commission (NIC) has stated that it has not decided yet on when to increase the minimum capital requirement in the sector.
There were reports last year that the commission was planning on pegging the new capital requirement for insurance companies to around GH¢50million.
Currently, insurance companies are required to have GH¢15million before they can do business in the country.
The proposed increment, per reports last year, was being necessitated by developments in the economy and to help insurance companies absorb industry risk.
The NIC is said to be considering second quarter of this year as the possible implementation date.
Analysts fear the development could lead to the folding up or mergers in the sector.
But speaking in an interview, the Commissioner of Insurance, Justice Yaw Ofori, said notwithstanding the fact that there was no timeline for the introduction of the new minimum capital requirement, any increment will be in the interest of local insurance firms.
“This has been something that has come up [and] we have been looking at it,” he said.
He continued, “We are looking at so many things; we don’t want to close down local insurance companies and we want to be very careful we don’t open it up to only foreign insurers else the local insurers cannot compete.”
The commission, he said, was working assiduously to ensure that local insurers can build capacity “so that they can absorb much insurance instead of sending them outside the country.”
“So, we are trying to strike a balance…but whatever we do we want to have empirical basis for any minimum capital adjustment. We just don’t want to come out and say this is the new minimum capital requirement. There should be some empirical reasoning,” he explained.
Asked when the new minimum capital requirement will be announced, the commissioner of insurance said: “it will be very difficult because…if myself and my staff agreed to something, I would have to send it to my board, then to the ministry of finance, that’s the ministry we work under.”
Story: Insurance with Kofi OWUSU TAWIAH
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