The Federal High Court, Abuja, on Thursday, ordered the National Insurance Commission (NAICOM) to appear before it over alleged planned recapitalisation of insurance and reinsurance companies in the country.
Justice Ahmed Mohammed gave the order after taking the argument of Counsel to the plaintiffs, Ayodele Akintunde (SAN), in a motion ex-parte marked: FHC/ABJ/CS/ 835/2020 and filed on July 22.
While the Incorporated Trustees of Standard Shareholders Association of Nigeria and Mr Godwin Augustine Anono are 1st and 2nd plaintiffs respectively, NAICOM is the sole defendant in the suit.
Akintunde informed the court that the commission had, in circulars numbered: NAICOM/DPR/CIR/25/19 of May 20, 2019; NAICOM/DPR/CIR/25-02/2019 of July 23, 2019, and NAICOM/DPR/CIR/25-03/2019 of December 30, last year, directed all insurance and reinsurance companies in Nigeria to increase their minimum paid-up share capital, in the manner stated in the circulars, not later than September 30, 2021, without compliance with the requirements of the law.
“Despite the plaintiffs/applicants solicitor’s letter to the defendant on the 16th of April, 2020, the disastrous economic consequences of the COVID-19 pandemic as a result of the total lockdown and shutdown of the economic activities which has affected all sectors of the economy in Nigeria and all over the world, the defendant is headstrong on continuing with recapitalisation process as stipulated in the defendant’s circulars.
“The 2nd plaintiff and other trustees and members of the 1st plaintiff have invested a lot of money in buying shares in insurance and reinsurance companies affected by the defendant’s circulars and they also hold policies of insurance companies,” he said.
The lawyer expressed fear that NAICOM might continue with the implementation of the directive despite the current economic situation foisted in the country and the world by the pandemic.
He urged the court to grant his prayer, asking it to hear the case as a matter of urgency during the ongoing vacation pursuant to Order 46 Rule 5(1) and (2) of the Federal High Court (Civil Procedure) Rules 2019.
Akintunde argued that if allowed to continue with the policy, this might restrict the business of insurance and reinsurance in the country and cripple the plaintiffs’ and members of the 1st plaintiff’s source of livelihood.
According to him, unless this matter is heard as a matter of urgency during the vacation, the 2nd plaintiff and other members and trustees of the 1st plaintiff will suffer irreparable damage, untold hardship and a complete collapse of their investments by the death of many insurance companies and the default by insurers in respect of claims on their various policies.
Justice Mohammed, after listening to the counsel, ordered NAICOM to appear before the court on August 20 to show cause why the interim order of injunction being sought by the plaintiffs should not be granted.