The National Insurance Commission (NIC) has increased the minimum capital requirement of insurance companies by over 300 percent.
A statement issued by the commission said the increment comes after series of consultations with stakeholders since 2017.
It said it also considered the developments within the financial landscape over the period.
For Life and Non-life insurance companies, the minimum capital requirement has been increased from GH¢15 million to GH¢ 50 million.
For reinsurance companies, the minimum capital requirement has been increased from GH¢ 40 million to GH¢125million.
For insurance broking companies and loss adjusters, the minimum capital requirement has been increased from GH¢300 million to GH¢500 million.
The minimum capital requirement for reinsurance broking companies has however been maintained at GH¢ 1 million.
The affected institutions have been given up to June 30, 2021, to meet the new requirements.
The National Insurance Commission said the affected institutions are expected to submit their initial recapitalization plan by August 31, 2019, but “injection of property will not be accepted.”
“Any unencumbered property that is introduced will have to be sold for cash by at least six months before the capitalization date,” the Commission said.
While giving assurances that it is doing its best to protect the interest of insurance policyholders by ensuring a strong industry, the National Insurance Commission said: “the new MCR [Minimum Capital Requirement] is one of the initiatives the Commission is taking to achieve this.”
“The Commission will work with all industry players and provide the needed assistance to help the industry meet the new MCR,” the statement said.
Banking sector minimum capital requirement
A similar increment in the minimum capital requirement for banks in the country shook the banking industry, forcing some banks to merge while others had their licenses revoked.