Nigerian Legislation

1.     (1)    There shall be established a corporation to be known as the Nigeria Reinsurance Corporation (hereinafter in this Act referred to as "the Corporation') which shall be constituted in accordance with and shall have such powers and duties as are conferred on it by the following provisions of this Act.

(2)     The Corporation shall be a body corporate with perpetual succession and a common seal.

(3)     The Corporation may sue or be sued in its corporate name and may hold, acquire, and dispose of any property movable or immovable.

2.    (1)     Subject to the provisions of this Act, the Corporation shall have power, within or outside Nigeria, to carry on reinsurance of any class of insurance business, including life insurance business, and to reinsure against loss of any kind arising from any risk or contingency in respect of any matter whatsoever.

(2)    Without prejudice to the generality of section (1) of this section, the Corporation shall have power to do any of the following things, that is-

(a)     to reinsure with any insurer carrying on insurance or reinsurance business, any risk undertaken by the Corporation and for that purpose to enter into reinsurance contracts; and

(b)     to accept the reinsurance of any part of risks undertaken by any other person (being risks such that the Corporation has power to reinsure against) and to retrocede any part of such risk.

(3)    Except as may be expressly provided for by an order made under subsection (5) of this section, the Corporation shall have power to do anything or to enter into any transaction which in the opinion of the Board is calculated to facilitate the due performance of the functions of the Corporation under this Act and in particular the Corporation may-

(a)    acquire any undertaking of any registered insurer or acquire, hold or have any shares or stock in, or any financial interest in any such undertaking;

(b)     acquire and invest in any other profitable business;

(c)     assist in organising training schemes for employees of any registered insurer.

(4)    Notwithstanding the provisions of this section, the African Reinsurance Corporation shall deal directly with insurance and reinsurance companies operating in Nigeria in respect of the five per cent compulsory cessions emanating from Nigeria.

(5)     Where the Minister is of the opinion that it is in the public interest so to do, he may, with the prior approval of the National Council of Ministers, by Order published in the Federal Gazette, abridge or restrict the powers of the Corporation to any extent necessary; and when so abridged or restricted the powers of the Corporation shall be exercisable subject to and in accordance with the provisions of the order, and not otherwise.

(6)    For the avoidance of doubt, it is hereby declared that the foregoing provisions of this Act relate only to the capacity of the Corporation as a statutory corporation, and nothing in the said provisions shall be construed as authorising the disregard by the Corporation of any rule of law.

3.     (1)     There shall be a Board of Directors of the Corporation (hereinafter referred to as "the Board") which shall, subject to the general direction of the Minister, be responsible for the overall policy and general management of the Corporation.

(2)     The Board shall comprise the following members, that is to say -

(a)    eight persons (being persons who are not Federal or State public officers), appointed by the President, one of which members shall be appointed as Chairman of the Board by the President; and

(b)     the Managing Director of the Corporation.

(3)     The Chairman shall hold office for three years and shall be eligible for re- appointment.

(4)     The Chairman may resign his appointment by a letter addressed to the Minister and the resignation shall take effect from the date on which the letter is received by the Minister.

(5)     The supplementary provisions of the First Schedule to this Act shall have effect in relation to the procedure at meetings of the Board and such other matters as are specified therein.

4.     (1)     Subject to subsection (2) of this section, the Corporation shall be liable to taxation under any applicable law (including liability for any duty, rate, levy or other charge whatsoever whether general or local properly levied and payable.)

(2)     Nothing in this section shall be construed as imposing liability for company income tax upon the Corporation until such time as the amount in the general reserve fund of the Corporation is for the first time equal to twice the amount of the paid-up capital of the Corporation.

5.     (1)    The Minister may give to the Board directions of a general or of a special nature with regard to the exercise of the functions of the Corporation; and, as the case may require, it shall be the duty of the Chairman, the Board and the Managing Director to comply with the directions unless matters of policy are in dispute.

(2)     In the application of subsection (1) of this section, where the Minister intends to initiate a policy affecting the exercise of the functions of the Corporation, he shall consult with the Board and in the event of disagreement between the Minister and the Board over the implementation of that policy, the policy and any directive issued in that respect, shall stand suspended, so however that if any part of the policy so in dispute is severable from any other aspects of the policy not in dispute, the policy or the directive issued shall be suspended only in respect of the part in dispute; and thereafter the policy, or the part in dispute, so suspended shall, upon its being referred by the Minister to the National Council of Ministers, be affirmed, modified, or rejected by that Council, and the Council may give such directions thereon as it thinks fit.

6.     (1)     The Insurance Act shall apply to the Corporation to the same extent as it applies to insurers under that Act; and accordingly, and in so far as the provisions of the Insurance Act are not inconsistent with those of this Act, the Corporation shall, where applicable, comply with the requirements of that Act as if the Corporation were an insurer registered pursuant to that Act and the Insurance Act shall in relation to the Corporation have effect and be construed accordingly.

(2)     The provisions of subsection (1) of this section shall apply mutatis mutandis to the National Insurance Corporation of Nigeria established pursuant to the National Insurance Corporation of Nigeria Act.

7.     (1)     Subject to subsection (2) of this section, a registered insurer shall, in respect of every insurance policy issued or renewed by it on or after 1st January, 1978 reinsure with the Corporation an amount equal to twenty per cent of the sum insured in the policy, upon and subject to the provisions of the Second Schedule to this Act; and the registered insurer shall forthwith pay over to the Corporation an amount equal to twenty per cent of the premium received by the registered insurer on the issue or, as the case may be, renewal of the policy.

(2)     The Corporation shall, in respect of any reinsurance ceded to it pursuant to section (1) of this section by a registered insurer, pay to such registered insurer commission at such rate as the Corporation may determine after taking into account any applicable commercial consideration; but no profit commission shall be payable on such cessions.

(3)    In respect of reinsurance business above the legal cession, that is, the percentage of cession specified in subsection (1) of this section, the Corporation shall have the right of first refusal of any reinsurance business from Nigeria before such business is placed in the international reinsurance market.

(4)     Where the Corporation exercises the right of first refusal conferred upon the Corporation under subsection (3) of this section, the Corporation shall issue a certificate to this effect to the insurer before such reinsurance is placed in the international market.

8.     (1)     Without prejudice to the provisions of section 7(2) of this Act, where any registered insurer contravenes or fails to comply with any requirement of that section and thereby evades or fails to pay any amount of premium which is due from and payable by it under section 7(1) of this Act, the amount of the premium so unpaid shall-

(a)     notwithstanding any other enactment, be a first charge on the property of the registered insurer; and

(b)     be a debt due to the Corporation, and the Corporation may sue for and recover that amount in any court of competent jurisdiction from the registered insurer.

(2)     In any action brought under subsection (1) of this section, the production by the Corporation of a certificate signed by the Director of Insurance setting out the name of the defendant and the amount of premium due shall be sufficient evidence of the amount so due, and sufficient authority for the court to give judgment for the said amount.

10.     (1)          The authorised capital of the Corporation shall be ten million naira divided into 10,000 shares of N1000 each out of which there shall be issued such proportion as may be resolved by the Board and approved by the Minister and all the issued share capital shall be subscribed by and paid up at par by the Federal Government upon the establishment of the Corporation.

  (2)          Any further portion of the authorised capital of the Corporation may be called up and the Board may, with the approval of the Minister, from time to time resolve and the Federal Government shall subscribe and pay up the amount so called up.

  (3)          The Minister may, from time to time, with the approval of the National Council of Ministers, increase the share capital of the Corporation, by order published in the Federal Gazette and, as soon as may be after any such increase, the Board may make calls for the additional shares on such terms and conditions as the Board may determine.

(a)             fifty per cent of the net profits of the Corporation for the year, when at the end o f the year the fund is less than the authorized capital of the Corporation;

(b)            twenty-five per cent of the net profits of the Corporation for the year , when the fund is equal to or exceeds the authorized capital of the Corporation.

   (2)          After any allocation has been made in terms of subsection (1) of this section, the balance of the net profits shall be paid to the Federal Government.

13.     (1)          There shall be an employee of the Corporation who shall be called the Managing Director and who shall be the chief executive of the Corporation and shall be responsible for the day-to-day management of the affairs of the Corporation.

  (2)          The Managing Director shall be appointed by the National Council of Ministers on the recommendation of the Minister.

  (3)          Any person appointed as the Managing Director shall not, while he is the holder of that office, be the holder of the office of a director in any bank, corporation, company or any other concern except with the approval of the Minister.

14.     (1)          There shall be appointed by the Corporation a Secretary to the Corporation who shall not be a member of the Board.

  (2)         The Secretary shall be responsible to the Chairman and the Managing Director and be under their direction and control.

  (3)         The Secretary shall keep the records and conduct the correspondence of the Corporation and perform such other duties as the Chairman or Managing Director may, from time to time, direct and, without prejudice to the generality of the foregoing, the Secretary shall be responsible for the following matters, that is to say –

(a)             making arrangements for meetings of the Board;

(b)             preparing the agenda and the minutes of such meetings;

(c)             conveying decisions of the Board to members of the Board; and

(d)             arranging for payments of fees and allowances and all other matters affecting members of the Board.

15.     (1)          The Board shall make rules for the establishment and maintenance of a fund to be known as the Nigeria Reinsurance Corporation Pension and Welfare Fund for providing pensions to employees of the Corporation, and in the case of injuries to such employees or of their death while engaged on the Corporation's business, for providing benefits to them or their dependants.

  (2)          Provision shall be made by the rules for the payment of contributions to the said fund by the Corporation or the employees of the Corporation or by both, as the Minister may direct or require.

  (3)          Rules made for the purposes of this section shall not have effect until approved by the Minister.

16.     (1)          The Corporation shall keep proper accounts and proper records in relation thereto and shall, in respect of each financial year, prepare a balance sheet, a profit and loss account, revenue accounts and other statements and abstracts, in accordance with the requirements of the Insurance Act.

  (2)          The accounts of the Corporation shall be audited by auditors in Nigeria appointed annually from the list of auditors and in accordance with the guidelines supplied by the AuditorGeneral of the Federation of the Council of Ministers.

  (3)          The auditors shall, on completion of the audits of the accounts of the Corporation for each financial year, prepare and submit to the Board the following two reports, that is to say –

(a)             a general report setting out the observations and recommendations of the auditors on the financial affairs of the Corporation for that year and on any other important matters which the auditors may consider necessary to bring to the knowledge of the general. public; and

(b)            a detailed report containing the observations and recommendations of the auditors on all aspects of the operations of the Corporation for that year.

First Schedule

1.      Subject to this Act and section 27 of the Interpretation Act (which provides for decisions of a statutory body to be taken by a majority of its members and for the person presiding to have a second or casting vote), the Board may make standing orders regulating the proceedings of the Board or any committee thereof, in particular, as respects

(a)      the holding of meetings;

(b)      notices to be given of such meetings and proceedings thereat;

(c)      the keeping of minutes, and the custody, production and inspection of such minutes; and

(d)      the opening, keeping, closing and auditing of accounts.

(a)     by any vacancy in the membership of the Board; or

(b)     by any defect in the appointment of a member of the Board; or

(c)     by reason that a person not entitled to do so took part in the proceedings of the Board.

  Section 7(1)