Ghana Union Assurance Life Company Limited and Phoenix Life Assurance Company Limited have consolidated their operations in order to meet the new capital requirement imposed by the National Insurance Commission (NIC) to remain in business.
This follows the approval of the merger by the NIC in accordance with section 88 of the Insurance Act 2021 (Act 1061), which gives the commission the power to approve or refuse an application for merger.
Upon the successful implementation of the merger, the name of the merged entity will be Ghana Union Assurance Life Company Limited.
The commission in a notice copied to the Graphic Business said all policyholders of Phoenix Life Assurance Company Limited, whose policies had not expired, would become policyholders of Ghana Union Assurance Life Company Limited.
The merger was approved as part of efforts by the NIC to protect the image of the industry, its policy holders, as well as save jobs, following the deadline of the recapitalisation exercise in the industry.
After the deadline for the new capital requirement elapsed in December 31, 2021, it has emerged that some insurance companies have failed to meet the new threshold required for them to remain in business.
Some of the companies which were not able to meet the requirement have been written to by the commission and processes are currently underway to help them to meet the requirement or risk losing their licences.
Although the NIC is yet to make an official statement on the recapitalisation exercise, it is currently engaging with the affected companies to resolve the issues in a way that would protect the image of the industry, protect policyholders and save jobs.
The NIC in June 2019 announced a new capital requirement for insurance companies operating in the country after a series of consultations and discussions between the industry players and the regulator.
All the companies were expected to meet this new requirement by June 30, 2021.
However, six months to the deadline, the NIC extended the deadline by a further six months to January 2022 due to the outbreak of the COVID-19 pandemic which hit hard at businesses all over the world.