The National Insurance Commission (NIC) has hinted it will announce a new minimum capital for insurance companies in the country before the close of this year.
He said the commission was raising the current minimum capital which was currently standing at GH¢15 million to ensure a competitive insurance market which was not overcrowded.
Speaking at an event to rebrand UT Life to miLife Insurance in Accra on October 10, the Head of Supervision of the NIC, Mr Seth Eshun, explained that the delay by the commission to announce a new capital requirement for the industry players was as a result of the recent developments in the banking sector.
“We all see the turmoil in the financial sector and it is not the best of time. We are doing our best to make sure our sector is insulated from these difficulties as much as possible,” he said.
He explained that the introduction of the new capital was not a move to prevent new companies from entering the industry, but to maintain a strong sector.
Requirement in tiers
When asked whether the introduction of the new capital requirement would not bring difficulties, especially at a time when the banking industry was undertaking a similar exercise, he said the commission had thought about it and had decided to introduce it at the end of the year when all banks were expected to be done with raising their required capital.
That, he said, would ease the industry’s pressure adding that insurance companies would be given ample time to meet the requirement.
Mr Eshun stated that the commission was still deciding whether to introduce the capital requirement in tiers, although it was not 100 per cent certain about that option.
“Capital requirement in tiers is one of the options but I can assure you that we are not 100 per cent certain about it. The commission is still studying what is practised in other countries such as Nigeria to see what is best for the industry here in Ghana,” he said.
The Chief Executive Officer (CEO) of miLife Insurance, Mr Kwaku Yeboah-Asuaman, denied claims that the company’s rebranding was to prevent the rippling effects of the collapse of UT Bank on the company.
He said talks about rebranding UT Life started three years ago while UT Bank was still operational and added that the company’s financial position had even become stronger after the bank collapsed.
“The balance sheet of the company before the takeover of UT Bank was GH¢7.5 million as compared with the stated capital now which stands at about GH¢56.8 million,” he said.
Mr Yeboah-Asuaman said: “as the business environment continues to witness significant changes, we cannot remain static. We must be responsive to the exigencies of time”.
“While we have always focused on serving our customers well, this re-launch of UT Life Insurance to miLife Insurance signals to customers that we have embarked on an even deeper commitment to help enrich lives and support dreams by making access to insurance easier, affordable and more accessible” he said.
With insurance penetration in the country still at its infancy, Mr Yeboah-Asuaman said there was a huge potential in the market and when positioned well, it could reach out to those who were not insured.
Mr Eshun, therefore, charged staff of miLife Insurance to offer their customers with quality service because the company could not only thrive on the name. — GB