The National Insurance Commission (NAICOM) has intensified efforts to strengthen the financial resilience of Nigeria’s insurance industry, appointing global professional services firm Ernst & Young (EY) as consulting actuary to support the finalisation and implementation of a Risk-Based Capital (RBC) framework.
The move signals a major step in the regulator’s ongoing reforms aimed at aligning the industry’s capital requirements with the actual risks undertaken by insurers, while enhancing policyholder protection and promoting long-term financial stability.
Olusegun Omosehin, commissioner for insurance and chief executive officer of NAICOM, disclosed the development in a statement, noting that the engagement forms part of the commission’s Risk-Based Capital Implementation Project.
According to Omosehin, the RBC framework represents a significant shift from traditional capital regulation towards a more risk-sensitive supervisory model that ensures insurance companies maintain capital levels commensurate with their risk exposures.
He said the initiative is designed to strengthen the resilience of insurance operators, improve regulatory oversight, and build public confidence in the insurance sector.
“This strategic shift is aimed at strengthening financial stability and enhancing policyholder protection across the industry,” Omosehin stated.
The commissioner explained that following the enactment of the necessary legislation and the ongoing Minimum Capital Requirement (MCR) recapitalisation exercise, NAICOM has stepped up efforts to operationalise a risk-based capital regime tailored to the realities of the Nigerian insurance market.
Under the arrangement, EY will provide technical support to accelerate implementation of the framework, strengthen NAICOM’s internal capacity, and help develop a regulatory structure that is transparent, robust and suited to local market conditions.
“Under the engagement, EY will support NAICOM to accelerate implementation, strengthen internal technical capacity, and ensure that the resulting regulatory framework is robust, transparent and fit for purpose within the Nigerian market context,” Omosehin said.
He added that the implementation of the RBC framework would be synchronised with the completion of the current recapitalisation programme, which is expected to conclude on July 31, 2026.
As part of the next phase of the project, the commission plans to undertake Quantitative Impact Studies (QIS) and extensive industry-wide data collection exercises to assess the implications of the framework and refine critical risk parameters.
The exercises, according to NAICOM, will also deepen stakeholder engagement and provide the basis for the issuance of the final risk-based capital framework and accompanying regulatory guidelines.
“These activities will support recalibration of key parameters, deepen stakeholder engagement, and inform the issuance of the final framework alongside comprehensive regulatory guidelines,” Omosehin noted.
EY reaffirmed its commitment to the assignment, describing it as a priority engagement. The firm said it would work closely with NAICOM and stakeholders across the insurance industry to develop a practical and implementable framework, as well as the tools required for effective supervision and execution.
The development comes as NAICOM continues to pursue reforms aimed at improving the financial health of insurance operators and strengthening the industry’s capacity to absorb shocks.
In recent months, the commission has repeatedly emphasised its commitment to ensuring that no licensed insurance company collapses under its watch, maintaining that policyholder protection remains at the centre of its regulatory mandate.
Industry observers view the planned transition to a risk-based capital regime as a critical milestone in the evolution of Nigeria’s insurance market, as it is expected to encourage stronger risk management practices, improve solvency monitoring, and align the sector more closely with global regulatory standards.
With the July 31, 2026 recapitalisation deadline drawing closer, the regulator’s latest move suggests that NAICOM is laying the groundwork for a more resilient insurance industry in which capital adequacy is determined not only by size but also by the level of risk assumed by individual operators.
