Justice Yaw Ofori (second left) followed by Charles Adu Boahen, Ray Ankrah and other member of the board in a pose after the brief meeting in the Deputy Minister’s office
The National Insurance Commission (NIC) has appealed to the Bank of Ghana (BoG) to increase the minimum capital requirement for insurance companies in the country.
The newly-appointed Commissioner of NIC, Justice Yaw Ofori, said the current minimum capital requirement of GH¢15 million should be increased to GH¢30 million, representing a 100 percent increment.
The Commissioner made the call on Thursday in Accra in an interview with the media after he paid a courtesy call on the Deputy Minister of Finance, Charles Adu Boahen.
The visit was aimed at formally announcing the new governing board of NIC, which was inaugurated barely two weeks ago to work in tandem with the Ministry of Finance to help achieve government’s objective of building a resilient financial sector to increase insurance penetration in Ghana.
Many people are calling on government to raise the minimum capital requirement for insurance firms in the wake of the recent increase in the minimum capital requirement for banks.
According to Mr Ofori, the move was aimed at growing the industry to create numerous opportunities in the country, especially in the oil and gas sector.
“It’s difficult for people to really increase their minimum capital requirement. But if they don’t increase their minimum requirement, then they cannot be big,” he said.
He explained that “in Ghana, now we have oil and gas, which means that the insurance industry needs more money to really absorb the risk.”
“When you are doing business with international partners and you are not big you cannot actually do much,” Mr. Ofori indicated.
The Commissioner said that “currently, a lot of money is leaving Ghana to offshore simply because the industry hasn’t gotten the capacity to absorb the business that comes in. So money is leaving Ghana, because they don’t have the capacity. We want to encourage local companies to actually build capacity so that we stand shoulder-to-shoulder with these big insurance companies.”
Increase In Penetration
Earlier, he stressed the need to increase insurance penetration in the country, which is currently said to be two percent.
Chairman of the NIC Board, Ray Ankrah, told the deputy minister that the Commission was prepared to work with the sector ministry to improve the industry.
According to him, the country’s insurance sector was underperforming with its current penetration rate of less than two percent.
He indicated that a new bill was currently before Parliament for consideration which is aimed at modernizing the insurance industry, saying the insurance industry to ensure the socio-economic development of the country.
The Deputy Minister, on his part, praised members of the board.
He expressed satisfaction “with the sense of urgency the board seems to have.”
He pledged the ministry’s unwavering support to NIC and the Board, saying the ministry’s doors are always open.
By Melvin Tarlue