Court restrains FG from re-capitalisation of insurance sector
On Thursday, a Federal High Court sitting in Abuja issued an interim order restraining the Federal Government from re-capitalising and consolidating the insurance sector.

Justice Anwuri Chikere granted the order, following a formal request by the Nigeria Re-Insurance Corporation and NICON Insurance.
The order, for now, bars the Attorney-General of the Federation and the Minister of Finance from implementing the report and recommendations of the Presidential Committee on Insurance Capitalisation.
Re-Insurance Corporation and NICON Insurance had told the court that the committee had concluded the review and submitted its report to the Federal Government.

They also contended that the Finance Minister, had, at a public forum said the report of the committee would be implemented to the letter.
A copy of the minister’s speech was attached to the application.
Mr. Jude Agboje urged the court to restrain the defendants from implementing the report because his clients would be adversely affected by it.
He contended that the report recommended a cancellation of the privatisation of NICON and Nigeria Re-Insurance carried out by the Obasanjo administration.

Agboje said his clients had a pending suit, challenging the steps taken by the government in the recapitalisation and consolidation of the sector. He said that Section 9 (4) of the Insurance Act exclusively empowers the National Insurance Commission to carry out such review.
He added that the steps taken so far by the Attorney-General of the Federation and the Finance Minister were unconstitutional, null and void.

Chikere granted the order stopping the defendants, in the interim, from re-certifying the license given to the applicants, awaiting the determination of the substantive suit.

She also ordered that the report of the committee should not be implemented until the substantive suit had been determined.
She ordered service of the order and a hearing notice for the substantive suit on the defendant within three days and adjourned the suit to October 16.
Attorney-General of Federation and Federal Ministry of Finance are defendants in the suit.
The order bars NAICOM from any further breach of the Insurance Act of 2003 and that it must respect Section 315 of the 1999 Constitution.

Reacting to the new development, Mr. Jimoh Ibrahim, Group Managing Director, NICON Insurance Plc, said, we cannot fold our hands and watch the commission commit illegality and misadvise the minister; the first place to start recapitalisation is to amend the Act, just as the Central Bank did before recapitalisation of the banking industry and this is because due process and the rule of law have to be adhered to.
According to him, now that the court has ordered the Federal Government not to consider at all or implement the report, we  are very happy that its illegality has been put to rest, the report is consistently inconsistent an abuse of due process.

Ibrahim said that unless the escrow money is released and all fees collected by NAICOM refunded, he would again approach the court for a mandamus order compelling the commission to do so and NAICOM to pay 17 per cent commercial interest on the deposit.
The Group Chairman of Alliance and General Insurance Plc, Otunba Biyi Olafisoye said that regulators all over the world always encourage merger where shareholders had voluntarily agreed to do business together, arguing that it is sad to note that NAICOM introduced mischief in the entire exercise.