Apparently, in view of the huge loss of investment from Nigerian stock market and the meltdown around the world, reinsurers have declined to renew treaties for some local underwriters.
It was learnt that renewal for some companies was deferred until they can provide the reinsurers with more information on their financials.
Most CEOs were in Mauritius about a fortnight ago to renew covers for their risks with Munich Re but were asked to return with more detailed information on the accurate position of the books before renewals could be effected.
Reinsurance cover is a mandatory requirement for approval of insurance operations by the industry regulator.
A good reinsurance cover protects the risks which insurers write and assist them significantly to meet claims obligations to policyholders.Â Absence of adequate reinsurance exposes the underwriter and the policyholder to risks of inability to recoup from losses.
It was gathered that the twin losses of Benin Plant of Nigeria Bottling Company and another pharmaceutical company and the alleged poor underwriting of the businesses put the local market and the underwriters involved in the accounts on the spotlight.
In accordance with relevant insurance laws, the affected underwriters still have a grace period to renew their securities with reinsurers before they can be stopped by th regulator after inspecting their books for compliance in the first quarter of 2010.