Court Restrains NAICOM from Enforcing Deadline on Recapitalisation of Insurance Firms
As anticipated, the court has apparently saved NAICOM the embarrassment of being seen as “unable to accomplish the deadline” set given the realities of, and impact of Covid-19 in the year. This action has equally, and by implication, stopped the delicensing of the bad eggs in the industry – requiring the regulator to review its interventions and engagement with the sector for which new opportunities has opened up for the creation/deployment of impactful insurance services and products built on the trust basis of claims settlement.
On Monday, December 21, 2020, Justice C. J. Aneke of the Lagos Division of the Federal High Court restrained the National Insurance Commission (NAICOM) from taking any further steps in implementing its deadline date for insurance and reinsurance companies to recapitalise.
Justice Aneke made the order on December 21 while delivering ruling in an ex-parte application brought before the court by the Incorporated Trustees of the Pragmatic Shareholders’ Association of Nigeria (details of trustees yet to be cited as Proshare awaits court judgment)
The motion, marked FHC/L/CS/1797/2020 and filed on December 15, 2020, was moved on behalf of the group by their lawyer, I.C. Ifedora.
The applicant(s) prayed the court for an order of interim injunction restraining the defendant and its agents from taking further steps in the recapitalisation process in the insurance industry pending the hearing and determination of its motion on notice before the court.
The Pragmatic Shareholders Association had asked the court to also restrain NAICOM from taking further steps or issuing further directives or circulars in a bid to enforce the December 31, 2020 and September 30, 2021 deadlines, or imposing any restrictions on the business of any insurance or reinsurance company for the purpose of enforcing NAICOM’s circular or directives on the recapitalisation, pending the hearing and determination of motion for interlocutory injunction filed in the suit.
But in the court documents obtained by ThisDay at the weekend, Justice Aneke, while delivering ruling in the ex-parte, after reading the affidavit in support of the motion sworn to by Bisi Bakare and after hearing I. C. Ifedora counsel to the applicant, made “an order for maintenance of the status quo ante belum as of December 21, pending the hearing and determination of the motion on notice already filed.”
The Pragmatic Shareholders Association had filed an origination summons asking the court to determine that in view of the global pandemic, the economic recession and the destruction of public and private property during the #EndSARS protests and the impact these factors have on the businesses of insurance companies, the refusal of NAICOM to rescind the recapitalisation deadlines is an abuse of power and an unreasonable exercise of regulatory powers pursuant to the Insurance Act and the NAICOM Act.
They are seeking an order to set aside the circular that imposed the deadlines.
