The Federal Ministry of Finance has directed the National Insurance Commission (NAICOM) to provide the legal basis for imposing N680 million in recapitalisation-related charges on NICON Insurance Limited and Nigeria Reinsurance Corporation, while ordering the regulator to suspend enforcement of the disputed fees pending the resolution of a petition by the two companies.
The directive was contained in a memo referenced F/LEG/0608/2026/22, dated August 6, 2026, and signed by Raymond Omachi, permanent secretary, federal ministry of finance, on behalf of the minister of finance and coordinating minister of the economy.
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 Nigerian Insurance Industry Reform Act (NIIRA) 2025.
At the centre of the dispute is NAICOM’s assessment of a one percent capital injection fee, in addition to processing and verification charges contained in Appendix 2 of its Minimum Capital Requirement Guidelines.
According to the ministry, NAICOM assessed N305 million against NICON Insurance and N375 million against Nigeria Re, bringing the total disputed charges to N680 million.
“The petitioners have raised notable grievances against the Commission regarding the assessment and demand for a 1 percent Capital Injection Fee alongside additional processing and verification fees pursuant to Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines, amounting to N305 million for NICON and N375 million for Nig Re,” the ministry said.
The companies have also challenged NAICOM’s directive requiring existing insurance operators to transfer their entire capital injection funds into an escrow account with the Central Bank of Nigeria (CBN).
The petitioners argued that the directive was inconsistent with Section 16(3) of NIIRA 2025, which provides for a 10 percent statutory deposit with the CBN.
NICON and Nigeria Re told the ministry that they had complied with the July 31, 2026 deadline for meeting the new minimum capital requirements, stating that they injected N20 billion and N30 billion, respectively, through Mudaraba Term Deposit accounts with Lotus Bank Limited.
The companies said the capital injections exceeded their respective adjusted capital requirements of N16 billion for NICON and N28 billion for Nigeria Re.
They further stated that they had made statutory deposits of N2.5 billion and N3.5 billion, respectively, with the CBN in line with Section 16(3) of NIIRA 2025.
The disputed charges had already resulted in payments by both companies, with NICON paying N80 million and Nigeria Re paying N75 million, according to the ministry’s memo.
Against this backdrop, the Finance Ministry asked NAICOM to provide a detailed response addressing the issues raised by the companies and to explain the legal justification for the disputed charges and directives.
“In view of the above, you are requested to provide a detailed response and legal justification regarding the issues raised,” the ministry said.
More significantly, the ministry directed NAICOM to suspend enforcement of the disputed measures against the two companies until the petition is determined.
“Pending the determination of the petition, the Commission should suspend the enforcement of the contested processing fees, 1 percent capital injection fee demands, and full-capital escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Corporation,” it stated.
The intervention comes amid the conclusion of the insurance industry’s recapitalisation exercise, which required operators to meet new minimum capital thresholds introduced under NIIRA 2025.
NAICOM recently announced that 43 insurance and reinsurance companies had successfully met the new minimum capital requirements, while eight others that submitted evidence of compliance shortly before the July 31 deadline were undergoing final verification.
Neither NICON Insurance nor Nigeria Re appeared on the list of 43 compliant companies or the eight firms undergoing final verification.
The position of Nigeria Re has since become more contentious after NAICOM revoked the reinsurer’s operating licence over its failure to meet the statutory minimum capital requirement under NIIRA 2025.
The regulator also froze the company’s bank accounts and appointed Muiz Banire as receiver and provisional liquidator to oversee the winding-up of its affairs.
