Players within the insurance sector say they have reason to suspect that Finance Minister is on a serious agenda to muzzle them out of the industry so that his Enterprise Insurance firm will become pre-eminent.
Reacting to the new demands by government in the just read mid-year budget review in Parliament yesterday, the insurance businessmen told Ghanacrusader they were going to convene an emergency meeting to discuss the way forward.
They described the new measures as business unfriendly and will be counter-productive in the long run.
The National Insurance Commission announced an increment in the minimum capital requirement for insurance companies in the country from GH¢15 million to Gh¢50 million in June, 2019 and gave them June 30, 2021, to meet the new requirement.
Reiterating the NIC’s new minimum capital requirement, the Finance Minister, Mr. Ken Ofori-Atta, gave the components of the requirement for various players within the insurance sector.
Whereas, Life and Non-Life Insurers have had their minimum capital requirement raised from GH¢15 million to GH¢50 million, Brokers and Loss Adjustors have had their capital requirement increased from GH¢300,000 to GH¢500,000.
Additionally, reinsurers have had theirs increased from GH¢40 million to GH¢125 million. The requirement for Reinsurance Brokers has been maintained at GH¢1 million.
The move, according to government, is to address the challenge of low capitalization in the industry.
“The new minimum capital will apply immediately to newly licensed companies and existing insurance companies will have up to June 2021 to meet the new minimum capital requirements,” Ken Ofori-Atta, stated.
Meanwhile, speaking on condition of anonymity, exclusively with Ghanacrusader.com, a big wig within the insurance sector says, the requirement is needless.
He uttered, “I don’t see the need because we have reinsurance companies that take care of our excess capacity…more so the insurance market is not growing to demand a huge capital so what is the point in locking up huge capital which will be idle.”
He stressed,…”its a bogus suggestion period!”
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 GH¢3 billion.