Nigeria’s insurance reform agenda faces a fresh credibility test as questions mount over whether the new capital regime will be applied consistently across all operators.
The issue has come into sharper focus following an open letter by Mohamed Kari, a former commissioner for insurance and former managing director of NICON Insurance and Nigeria Reinsurance Corporation, who urged the federal government to allow the National Insurance Commission (NAICOM) to exercise its statutory powers without political interference.
Kari made the call in an open letter dated August 12, 2026 and addressed to the Minister of Finance and Coordinating Minister of the Economy, as the disagreement between NAICOM and two legacy insurance institutions, NICON Insurance Limited and Nigeria Reinsurance Corporation, continues to unfold following the industry’s recapitalisation exercise.
Central to the disagreement are issues surrounding the assessment of recapitalisation-related fees, the regulatory treatment of funds said to have been injected into the affected companies and NAICOM’s directive requiring the transfer of capital into an escrow account with the Central Bank of Nigeria.
The disagreement has emerged against the backdrop of the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which introduced a new capital framework aimed at strengthening the financial capacity of insurance and reinsurance companies, improving claims-paying ability and enhancing the industry’s capacity to underwrite larger risks.
Under Section 15 of NIIRA 2025, insurers are required to maintain minimum capital of ₦15 billion for non-life insurance business and ₦10 billion for life assurance business, while reinsurers are required to maintain a minimum of ₦35 billion, or the higher amount determined under the Commission’s risk-based capital framework.
NAICOM has been implementing the new regime through a verification process following the July 31, 2026 deadline for companies to demonstrate compliance.
On August 3, the regulator announced that 43 insurance and reinsurance companies had met the new minimum capital requirements, while eight companies that submitted evidence of compliance shortly before the deadline remained subject to final verification and regulatory review.
NICON Insurance was not among the companies listed as verified at that stage.
The Commission subsequently announced on August 13 that seven of the eight companies under final review had been confirmed as compliant, bringing the total number of verified insurance and reinsurance companies to 50, comprising 48 insurers and two reinsurers.
Nigeria Re, meanwhile, had its operating licence revoked with effect from August 3, 2026 and was subsequently placed under receivership.
The regulatory actions have become the subject of further controversy following intervention by the Federal Ministry of Finance.
Business A.M. reported on August 10 that the ministry said it had received a petition from NICON Insurance and Nigeria Re challenging aspects of NAICOM’s implementation of the recapitalisation exercise under the NIIRA 2025.
The Ministry had asked NAICOM to provide its detailed response and legal justification for about ₦680 million in recapitalisation-related charges imposed on NICON Insurance and Nigeria Re.
The Ministry also directed NAICOM to suspend enforcement of the disputed charges pending the resolution of a petition submitted by the two companies.
Kari challenges political intervention
Against this backdrop, Kari has argued that allowing political intervention in NAICOM’s regulatory decisions could undermine the principle of equal treatment within the insurance industry.
In his open letter, he said the issue was not simply about the financial demands placed on individual companies but whether the same regulatory standards would be applied consistently across the market.
“The central issue here is not whether statutory requirements feel inconvenient or demanding to any individual operator; financial regulations, by their very nature, impose rigorous demands. The fundamental question is simply this: are the rules applicable to everybody?” Kari noted.
He claimed that more than 90 percent of operators had complied with the recapitalisation process by raising fresh capital, depositing required reserves with the CBN, undergoing verification and settling regulatory fees.
Kari alleged that NICON and Nigeria Re were instead seeking “special dispensation through political channels”, including through petitions to the Ministry of Finance over regulatory directives, capital checks and escrow requirements.
“When compliance is treated as mandatory for 90 percent of the market but optional for a selective few, the concept of statutory regulation collapses into favouritism,” he said.
He argued that if Nigeria is to refine and strengthen its insurance sector to compete more effectively in the global market, the country needs more than legislation establishing higher capital thresholds.
The market, he said, must also operate under fair, transparent and consistent rules that apply to every participant.
The former commissioner also questioned the Ministry of Finance’s intervention in what he described as a matter of regulatory enforcement, arguing that such intervention could undermine NAICOM’s statutory authority.
Kari pointed to Sections 8(6) and 8(9) of NIIRA 2025, which, he noted, clearly prescribe the procedure to be followed where an insurance operator’s licence is cancelled.
He argued that the provisions do not confer a role on the Ministry of Finance in the process, raising questions over the basis for the Ministry’s intervention in the dispute.
“Why then should insurance operators treat regulatory compliance as a matter open to political lobbying? Why should the Ministry of Finance be patronised to intervene in pure regulatory enforcement?” he added.
Kari also argued that the historical importance of NICON and Nigeria Re should not exempt the two institutions from the regulatory requirements currently applicable to the wider insurance industry.
The ex-NAICOM chief executive noted that the companies were not ordinary entrants into the market, pointing out that both were established by the Federal Government, with NICON founded in 1969 and Nigeria Re in 1977.
He further contended that the challenges facing the two institutions became more pronounced following their privatisation in the mid-2000s, with governance issues subsequently leading to interventions at different periods by NAICOM and the Asset Management Corporation of Nigeria (AMCON).
According to him, the two institutions played important roles in the development of Nigeria’s insurance industry, particularly by contributing to domestic underwriting and reinsurance capacity as well as providing professional training for industry practitioners.
However, Kari argued that their historical significance should not become a basis for preferential treatment.
“Rather than allowing the market to refine itself through equal competition, legacy status has repeatedly been used as a shield against the very standards required of everyone else,” he said.
Kari also questioned whether the current market position of the two institutions justified government intervention, arguing that they no longer represented the systemically important players they once were.
“These are no longer the market giants they once were decades ago,” he said, adding that their current market footprint was not significant enough for their regulatory difficulties to pose a systemic threat to Nigeria’s wider financial system.
The former commissioner warned that granting concessions to selected operators could create an uneven competitive environment, discourage companies that had already strengthened their capital positions and ultimately weaken investor confidence and policyholder protection.
He consequently urged the Federal Government to resist what he described as special carve-outs for operators that had not met the same requirements as their competitors.
“The Federal Government must resist the urge to grant special carve-outs or act as an informal court of appeal for failing operators,” he wrote.
“NAICOM is the state’s empowered regulator; it must be permitted to apply the law equally to every company, whether privately owned, historically state-created, or under asset management control,” Kari added.
The dispute has consequently evolved beyond the question of whether NICON and Nigeria Re have satisfied the new capital requirements. It now touches on a broader issue surrounding the independence of Nigeria’s insurance regulator and the extent to which government ministries should intervene when regulated institutions challenge decisions taken by their statutory regulator.
While Kari’s comments represent his position on the matter, NICON Insurance and Nigeria Re had not, as of the time of filing this report, publicly responded to the assertions contained in his open letter.
