A Federal High Court sitting in Lagos south west Nigeria today,restrained the National Insurance Commission (NIC) to stop the implementation of their proposed minimum solvency capital policy scheduled to take effect from Sept 14 pending the expiration of a 30 days pre-action notice issued.
The Presiding vacation Judge Justice Muslim Hassan, gave the order in a class action brought by some shareholders of insurance companies in Nigeria, challenging the new minimum solvency capital policy proposed by the NIC.
Counsel to the applicant Bert Chucks Igwilo SAN, told the court that they had filed and served the NIC a pre-action notice on since September 6,2018.
He further said that the applicants had before the court, an ex-parte application seeking the order of the court restraining the NIC from enforcing the proposed policy pending the expiration of the pre-action notice.
Igwilo stated that the affidavit in support of the ex-parte application was supported Was sworn to by an applicant who was a shareholder in Aiico Insurance Plc and Cornerstone Insurance Plc.
He stated further, that attached to the ex-parte application was the motion on notice , the applicants intended to file at the expiration of the pre-action notice.
Consequently he urged the court to restrain the defendant from implementing the policy pending when the motion on notice is filed and served or else it would be too late,” he contended.
Justice Hassan, while adjourning till 8th of October, 2018 for further hearing acceded to the request of the applicant and ordered the defendant to stay further action pending the hearing and determination the substantive suit.
The NIC had on Aug 27, 2018 passed a circular with no. NAICOM/DAPCIR/14/2018, dividing the categories of business for insurance companies provided for by the insurance act into tiers.
They had prescribed a tier-based on minimum solvency capital for insurers on the basis of their respective risks profiles and their risks management systems.
The applicants who filed the action were; Mr Sunday Nwosu, Mr Adeniyi Adebisi, Mr Moses Oke, C.A.C Okpara, Mrs Ayodele Kudaisi, Mr Kenneth Nwosu, Mr Issac Obarinde and Mr Okechukwu Nwaguru.
They alleged that the proposed policy, passed in the circular, if implemented would affect the business and corporate existence of insurance companies and force them to sell their shares at an undervalue-rate.
In addition, they alleged that the policy was aimed at forcing licensed insurance businesses to increase their paid up share capitals by 100% or face losing their investments.
They also alleged that the proposed policy in the circular was inconsistent with the provisions of Section 25 of the National Investment Promotion Commission Act.