The National Insurance Commission (NIC) says it will announce the new minimum capital requirement for insurance companies by the end of the first quarter of the year.
The Deputy Commissioner of Insurance, Mr Kofi Andoh, told the Daily Graphic that the commission was still consulting with stakeholders to reach a workable figure.
This means that just like the banking industry, the minimum capital an insurance company needs to operate in Ghana is likely to go up.
The minimum capital for insurance companies, which currently stands at GH¢15 million, is to ensure a competitive insurance market strong enough to underwrite big ticket transactions.
“We want to ensure that we come out with something that is workable. We may not have full agreement with all the stakeholders but at least, we need to do adequate consultations to ensure that the implementation is smoother than what we see and hear,” he mentioned.
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The demand from the NIC comes on the back of rigorous reforms by the central bank which has seen mergers and collapse of some banks.
The insurance industry currently has 143 companies of which 56 are life and general business insurers, three are reinsurers, about 81 insurance brokers and three reinsurance brokers.
The Commissioner of Insurance, Mr Justice Yaw Ofori, told the paper last week that the minimum capital of insurance companies was likely to go up by more than 233 per cent – from GH¢15 million to GH¢50 million.
That of reinsurers would rise from GH¢40 million to GH¢125 million (212 per cent increase), while that of insurance brokers would move to GH¢500,000 which represents a 66.7 per cent increase from the present GH¢300,000.
“Under the proposal, which is currently before the Ministry of Finance, the capital of reinsurers brokers (broker-re) will, however, remain unchanged at GH¢1 million”, the Insurance Commissioner said.
However, asked about how much the insurance regulator would be demanding from the insurance companies as their financial backbone, Mr Andoh said a lot of proposals were on the table, including GH¢70 million and GH¢50 million, but since the stakeholders were still deliberating “It could end up being one of them.”
Motor insurance digitisation
Touching on new initiatives to throw fake insurance dealers out of business, he said the commission would digitise motor insurance policies by the end of the year.
“There are criminals who are forging this and selling them to motorists. The danger there is that if you buy, you might get a fake sticker which the police may not be able to detect. They might detect it when you have an accident.
He added that the best way to go was to digitise the motor insurance policy, explaining that the system would require a log in to know whether a policy was genuine or not.
Mr Andoh said the insurance sticker for vehicles would be a thing of the past when the digitisation project became operational.
“If you insure your car, it will be registered in the system. When a policeman stops you to check whether your car is insured, he will log in into the system and find your car there,” he said.