The amalgamation or transfer of interests in Nigerian insurance companies(usually by way of mergers or acquisitions) follows a unique procedure as outlined by the Insurance Act which slightly differs from the process outlined in the Companies and Allied Matters Act (CAMA) 2020 and which we will be looking at in this article.

This article will be mainly focused on the areas of :-

– The provisions of the act on amalgamations and transfers.

– Documents to be deposited with the National Insurance Commission (NAICOM) after amalgamation or transfer.

– Winding-up petitions under the Insurance Act.

– Voluntary winding-up under the act.

What does the Insurance Act say about amalgamations and transfers of insurers?

– The act provides that no insurer shall –

a). Amalgamate with, transfer to or require from any other insurer any insurance business or part thereof, without the approval of the Commission.

b). Without the sanction of the court :

(i). amalgamate with any other insurer carrying on life insurance business or workmen’s compensation insurance business,or

(ii). transfer to or acquire from any other insurer, any such insurance business or part thereof.

– The NAICOM may, before granting an approval under the relevant provisions of the act, call for such statements, documents and other information as shall enable it to reach a decision on the matter.

– If a class of insurance but mentioned here is intended to be amalgamated with another insurance business or where an insurer or the class of insurance business is intended to be transferred or acquired in whole or in part, the insurers concerned shall apply to the court to sanction the proposed amalgamation or transfer as the case may be. 

– Before an application is made to the commission for approval or to the court to sanction any transaction under this provision, notice of intention to make the application together with a statement of the nature of the amalgamation, transfer or acquisition shall, at least 3 months before the application is made , be published in at least 5 national newspapers served on the Commission.

What are the documents to be deposited with NAICOM after amalgamation or transfer?

– Within 3 months after the date of completion of the amalgamation, transfer or acquisition of insurance business, the insurer carrying on the amalgamated business or to whom the business is transferred or by whom the business is acquired as the case may be, shall furnish in duplicate to the commission :-

a). Certified copies of the agreement or deed under which the amalgamation, transfer or acquisition had been effected.

b). A certified copy of the agreement or deed under which the amalgamation, transfer or acquisition had been effected.

c). A certified copy of the actuarial or other reports upon which the agreement or deed was founded.

d). A declaration signed by each of the insurers concerned –

(i). that to the best of their knowledge and belief, every payment made or to be made to any person on account of the amalgamation or transfer is therein fully set forth, and

(ii). that no other payments beyond those set forth have been made either in money, policies, securities or other valuable consideration by or with the knowledge of any of the parties to the amalgamation or transfer.

What are the provisions of the act on winding up petitions involving insurers?

– A petition for the winding up of an insurer may be presented to the court either :-

a). Subject to the approval of NAICOM by not less than 50 policy holders, each of whom holds a policy that had been in force for not less than 3 years on the grounds set by CAMA 2020.

b). By NAICOM on any of the following grounds, that is :-

(i). that the registration of the insurer has been cancelled in accordance with the act;

(ii). that the insurance company cannot be revived despite the intervention of NAICOM.

– The provisions of CAMA 2020 shall have effect, subject to this Insurance Act, as if the petition was presented under CAMA 2020.

– In all cases NAICOM shall monitor the winding up processes. 

What is the priority ranking of debts to be settled upon the winding up of an insurer under the Insurance Act?

– Notwithstanding the provisions of CAMA 2020 or any law, the following priority list shall be followed in settling debts owed by the company –

a). Liquidated fees

b). Secured creditors

c). Policy holders

d). Other creditors

e). Staff

f). Shareholders and Directors

What are the provisions of the Insurance Act on voluntary winding up of insurers?

– Notwithstanding the provisions of CAMA, no insurer which transacts life insurance business shall voluntarily wind-up its business except for the purpose of effecting an amalgamation, transfer or acquisition under this Act.

Bitcoin is a decentralized digital currency that operates without the need for a central authority or intermediary. It was created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. Bitcoin transactions are recorded in a public ledger called the blockchain, which ensures their validity and prevents double-spending.

One of the most distinctive features of Bitcoin is its limited supply of 21 million coins, which is expected to be reached around the year 2140. This scarcity makes Bitcoin a deflationary asset, meaning that its value tends to increase over time as demand outstrips supply. However, this also makes Bitcoin highly volatile and susceptible to market fluctuations.

The Bitcoin price index (BPI) is a measure of the average price of Bitcoin across various exchanges and platforms. It is calculated by taking the weighted average of the prices from different sources, such as

CoinDesk, Bitstamp, Coinbase, and others. The BPI is often used as a reference point for investors, traders, and enthusiasts who want to track the performance of Bitcoin in relation to other currencies or assets.

One of the most prominent features of Bitcoin is its volatility, which means that its price can fluctuate significantly in a short period of time. This can create opportunities for profit, but also expose users to losses. Bitcoin has experienced several market meltdowns in its history, where its price dropped by more than 50% in a matter of days or weeks. Some of the most notable ones are:

• The 2011 crash: In June 2011, Bitcoin reached an all-time high of $31.91, but then plummeted to $2.22 in November 2011, a drop of 93%. This was caused by several factors, such as hacking attacks on exchanges and wallets, technical glitches, media scrutiny, and regulatory actions.

• The 2013 crash: In April 2013, Bitcoin reached a new high of $266, but then crashed to $50 in a week, a drop of 81%. This was triggered by a massive sell-off by users who feared that the Mt. Gox exchange, the largest at the time, was insolvent and unable to process withdrawals.

– The 2017 crash: In December 2017, Bitcoin reached another record high of $19,783, but then plunged to $3,122 in December 2018, a drop of 84%. This was influenced by several factors, such as the emergence of competing cryptocurrencies, the rejection of exchange-traded funds (ETFs) by regulators, the hard fork of Bitcoin Cash, and the increased scrutiny by governments and tax authorities.

– The 2020 crash: In February 2020, Bitcoin was trading at around $10,000, but then collapsed to $3,867 in March 2020, a drop of 61%. This was mainly due to the global pandemic of COVID-19, which caused a widespread panic and liquidity crisis in the financial markets.

Despite these market meltdowns, Bitcoin has always bounced back and reached new highs. For example, in April 2021, Bitcoin surpassed $60,000 for the first time. This shows that Bitcoin has a strong resilience and a loyal user base that believes in its long-term potential. Some of the factors that have contributed to Bitcoin’s recovery are:

• The halving events: Every four years, the reward for mining new bitcoins is cut in half. This creates a scarcity effect that increases the demand and value of bitcoins. The halving events have occurred in 2012, 2016, and 2020.

• The institutional adoption: More and more companies and organizations have started to accept or invest in bitcoins as a form of payment or asset. Some examples are PayPal, Tesla, MicroStrategy, Square, Grayscale, and Fidelity.

• The innovation and development: The Bitcoin network and ecosystem have continued to evolve and improve over time. Some examples are the Lightning Network, which enables faster and cheaper transactions; the Taproot upgrade, which enhances privacy and scalability; and the SegWit activation, which increases block capacity and reduces fees.

• The social and political factors: Some users have turned to bitcoins as a hedge against inflation or currency devaluation in their countries. Some examples are Venezuela, Zimbabwe, Iran, and Turkey. Others have used bitcoins as a tool for activism or protest against oppressive regimes or policies. Some examples are Hong Kong, Belarus, Nigeria, and Myanmar.

The history of Bitcoin shows that it is a highly volatile but also highly resilient digital currency that has survived many market meltdowns. These events can be seen as learning opportunities for investors and users who want to understand the risks and rewards of Bitcoin better. Some of the lessons that can be learned from them are:

– Do your own research: Before investing or using bitcoins, it is important to educate yourself about how it works, what are its advantages and disadvantages, and what are the best practices for security and privacy.

– Diversify your portfolio: It is advisable to allocate only a small percentage of your portfolio to bitcoins or other cryptocurrencies, and balance it with other assets that have lower risk or higher stability.

– Manage your emotions: It is crucial to avoid panic selling or buying based on fear or greed, and instead adopt a long-term perspective and a rational strategy that suits your goals and risk tolerance.

– Be prepared for volatility: It is inevitable that bitcoins will experience significant price fluctuations in the future, so it is wise to be prepared for them and not to invest more than you can afford to lose.

Since its inception, Bitcoin has experienced several periods of rapid growth and sharp decline, often in response to external events or market sentiment. These episodes are sometimes referred to as “market meltdowns” or “crashes”, although they are not necessarily indicative of a long-term trend or a fundamental flaw in the system. Rather, they reflect the inherent volatility and unpredictability of a new and emerging technology that is constantly evolving and adapting.