As reported by The Guardian, insurance companies are looking for high revenue investment opportunities to utilize money raised through the suspended insurance recapitalization.
Several firms had fixed the funds collected to collect interest, while others had put the funds in escrow accounts, according to checks.
According to one of the insurance company operator, his company fixed the funds raised, while others planned to use the money to improve their operations. He said that he would not put his money in an escrow account with low to no returns.
Another operator explained that the funds were allocated based on how they were raised, noting that businesses that collect funds from stock sales are required by law to move their funds to an escrow account.
Insurance firms raised funds through a variety of methods during the paused recapitalization, including private placements, subsidiary sales, and asset sales, among others.
The National Insurance Commission (NAICOM) declared the suspension of the recapitalization on December 30, 2020, citing the need to comply with a court order that halted the process.
Adebayo Adeleke, the Managing Director of Lancelot Ventures Limited and a leading member of the Independent Shareholders Association of Nigeria (ISAN), warned operators to be cautious about how they use funds since the suspension was not cancellation.
He encouraged operators to keep raising funds, noting that they needed money to cover high-ticket risks.