By Onyewuchi Ojinnaka
A Federal High Court sitting in Lagos, on Thursday gave an order restraining the National Insurance Commission (NIC) from implementing their proposed minimum solvency capital policy scheduled to take effect from September 14, pending the expiration of 30 days pre-action notice.
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.
At the hearing of the matter on Thursday, counsel to the applicants B.C Igwilo (SAN), told the court that they had filed and served the NIC a pre-action notice on September 6.
He further said that the applicants had before the court, an originating summons ex-parte, restraining the NIC from enforcing the proposed policy pending the expiration of the pre-action notice.
Igwilo submitted that the originating summons ex-parte was supported by an affidavit sworn by an applicant who was a shareholder in AIICO Insurance Plc and Cornerstone Insurance Plc.
He further submitted that attached to the ex-parte application was the originating summons the applicants intended to file at the expiration of the pre-action notice.
“My Lord, I humbly apply that the defendant be stopped from implementing the policy pending when we file and serve our processes else it would be too late”, he said.
In his ruling, Justice Hassan gave the order and adjourned further hearing to October 8.
The NIC had on August 27, 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 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, CAC Okpara, Mrs Ayodele Kudaisi, Mr Kenneth Nwosu, Mr Issac Obarinde and Mr Okechukwu Nwaguru.
They contended that the proposed policy, passed in the circular, would affect the business and corporate existence of insurance companies and force them to sell their shares at an undervalue.
In addition, they claimed that the policy was aimed at forcing licensed insurance businesses to increase their paid up share capitals by 100 percent or face losing their investments.
They also argued that the proposed policy in the circular was inconsistent with the provisions of Section 25 of the National Investment Promotion Commission Act, 2003.