Over 300 workers to lose their jobs over NIC recapitalization directive – Expert

NIC has directed insurance firm recapitalise to GH¢50 by February 6, 2022

Directive by NIC on capital requirement retrogressive – Edgar Wiredu

Insurance Marketer, Edgar Wiredu, has indicated that about 300 people would lose their jobs should the NIC collapse insurance companies that do not meet its recapitalisation directive.

The National Insurance Commission (NIC) has given insurance firms in the country up to February 6, 2022, to recapitalise from GH¢15 million to GH¢50 million for them to be able to stay in business.

Speaking on the Star Fm’s Morning Starr on January 13, Edgar Wiredu said the directive would likely lead to the collapse of some five insurance companies which would lead to these job losses.

According to him, the directive by NIC was completely unnecessary since it would lead to so many job losses.

He said the NIC did not use the right formulae to compute the minimum capital requirement adding that the commission increased that requirement because the Bank of Ghana (BoG) raised its minimum capital requirement.

“What the law requires of the regulator to do is not what the regulator has done. What it has done is an arbitrary decision and it was based on the fact that BOG raised the minimum capital requirement. Raising the minimum capital is based on a certain formula and you haven’t done that but you are changing the laws from your offices,” he was quoted by starfm.com.

Edgar Wiredu again indicated that the move by the commission was retrogressive and should be reversed.

“Minimum capital is supposed to be liquid money. That money cannot be used for anything. It can only be touched with the approval of the regulator when there is an emergency. Brokers done don’t underwrite any insurance, so why should they provide minimum capital…this decision by the NIC is totally useless and unnecessary. We have to be progressive and not come out with directives that are retrogressive.”