Joy Agwunobi
Nigeria’s insurance regulator has firmly shut the door on any possibility of extending the ongoing recapitalisation deadline, insisting that operators must align with the timelines stipulated in law or risk being edged out of the market.
The National Insurance Commission (NAICOM) said the July 30, 2026 deadline for insurers to meet new minimum capital thresholds remains sacrosanct, describing it as a statutory requirement rather than a discretionary regulatory decision.
Speaking at a seminar for insurance correspondents in Abuja, Olusegun Omosehin, commissioner for insurance and chief executive officer of NAICOM, made it clear that the Commission lacks the legal authority to shift the deadline embedded in the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
Omosehin, who was represented at the event by Usman Jankara, NAICOM’s deputy commissioner for insurance (technical), said any adjustment to the recapitalisation timeline would require a full legislative process, including approval by the National Assembly and presidential assent, an option the regulator is not prepared to pursue.
“I would like to state unequivocally that the recapitalisation deadline will not be extended.The basic reason is this: it is the law,” Omosehin said.
According to him, the Commission cannot unilaterally amend timelines clearly spelt out in an Act of Parliament. “Once it’s the law, nobody has the power to extend what the law has indicated as a deadline. If you need to do that, you would need to go back to the National Assembly, get that section amended, and get Mr President’s assent. It is not a journey we’re willing to embark on,” he added.
The commissioner for insurance maintained that the July 30, 2026 deadline remains realistic for serious operators within the sector, noting that the recapitalisation window was deliberately structured to allow sufficient time for compliance.
He said the Commission is confident that insurers with strong governance, credible business models, and long-term commitment to the market will be able to meet the new capital requirements without difficulty.
“We believe that the deadline as clearly highlighted by NIIRA is doable, it is reasonable, and it is something serious players within the insurance sector will be able to meet within that timeframe,” Omosehin said.
He expressed optimism that the exercise would ultimately deliver a more resilient insurance industry, better positioned to meet policyholders’ expectations and support Nigeria’s broader economic ambitions.
“By the end of the deadline provided by NIIRA, that is 30th July 2026, we’ll be coming out to Nigerians with new insurance companies that have met the requirement, that are stronger, that are more well-managed, and that have the financial muscle to meet their obligations,” he said.
Beyond compliance, NAICOM framed the recapitalisation programme as a fundamental restructuring of the insurance market rather than a routine regulatory hurdle.
Omosehin described the exercise as a turning point that would redefine the industry’s relevance, both locally and internationally.
“The ongoing recapitalisation exercise in the Nigerian insurance industry is more than just a regulatory milestone. It is a bold transformation that will redefine the Nigerian insurance industry for global relevance,” he said.
As part of this shift, NAICOM is rolling out a risk-based capital framework designed to ensure insurers hold capital commensurate with their risk exposure. The Commission is also engaging the Big Four auditing firms to independently verify insurers’ capital positions, a move aimed at strengthening transparency and market confidence.
“This approach is to ensure and guarantee confidence, fairness, and trust in the process, reinforcing the industry’s commitment to global best practices,” Omosehin noted, adding that a stronger insurance sector is critical to the Federal Government’s ambition of building a $1 trillion economy.
Broader reforms under NAICOM
The regulator said recapitalisation is only one element of a broader reform agenda being pursued under its current leadership. Omosehin highlighted several initiatives aimed at tightening prudential oversight while encouraging innovation and inclusion.
These include the adoption of risk-based supervision focused on high-risk institutions, stronger market conduct enforcement, faster claims settlement processes, and what he described as “zero tolerance for non-settlement of complaints or claims.”
NAICOM is also pushing for wider insurance inclusion through microinsurance, Takaful, InsurTech-driven solutions, and products tailored to micro, small, and medium-sized enterprises (MSMEs). To support innovation, the Commission has established a technology directorate, an innovation hub, and a regulatory sandbox that allows controlled testing of new ideas such as embedded insurance and usage-based pricing models.
In addition, NAICOM is working with the Nigeria Police Force to improve enforcement of compulsory third-party motor insurance, a move the Commission believes will strengthen systemic resilience and boost public confidence.
According to Omosehin, sustained engagement with stakeholders and more visible enforcement have begun to shift public perception of insurance from a poorly understood product to one that is “gradually being trusted.”
Signed into law in August 2025, the Nigerian Insurance Industry Reform Act replaced decades-old insurance legislation and introduced sweeping changes aimed at modernising regulation and protecting consumers.
Under the Act, minimum capital requirements were significantly raised. Life insurance companies are now required to maintain a minimum capital base of ₦10 billion, general insurance firms ₦15 billion, while reinsurance companies must hold at least ₦35 billion.
The law also strengthens consumer protection through clearer claims settlement timelines, stiffer penalties for infractions, and the establishment of an Insurance Policyholders’ Protection Fund to safeguard policyholders in the event of insurer insolvency.
“NIIRA is therefore not just a law; it is a blueprint for a stronger, more inclusive insurance industry,” Omosehin said.
Looking ahead, he said NAICOM would intensify its focus on consumer protection, deepen supervision, expand its data and analytical capabilities, boost insurance penetration, and promote sustainability and innovation across the sector.
Industry praise, legal concerns
While NIIRA 2025 has been widely praised by industry stakeholders as a landmark reform capable of strengthening capitalisation, spurring innovation, and expanding insurance coverage nationwide, it has also attracted scrutiny from legal and corporate governance experts.
TNP, a commercial law firm, in a publication dated September 3, 2025, flagged potential regulatory bottlenecks within the Act, warning that some provisions could conflict with existing corporate governance frameworks.
According to the firm, certain aspects of the expanded oversight powers granted to NAICOM may sit uneasily alongside obligations under the Companies and Allied Matters Act (CAMA) 2020.
One example cited is the restriction preventing insurers from holding Annual General Meetings (AGMs) where NAICOM has not approved their annual returns.
TNP noted that such a provision may clash with companies’ statutory obligations under CAMA, which mandates the convening of AGMs regardless of regulatory approval of returns.
“While the Act enhances the Commission’s oversight of the insurance industry, certain provisions may inadvertently create governance concerns. For instance, preventing insurers from holding Annual General Meetings where annual returns are not approved could conflict with their statutory obligations under the Companies and Allied Matters Act 2020,” the firm stated.
The law firm also raised concerns about possible potential jurisdictional overlaps in the regulation of mergers and acquisitions (M&A) in the insurance sector. While NIIRA 2025 vests NAICOM with authority to approve or reject such transactions, the Federal Competition and Consumer Protection Commission (FCCPC) retains concurrent jurisdiction under the FCCPA to review mergers from a competition perspective.
“This dual oversight could create procedural and timing complexities unless there is clear regulatory coordination between the Commission and the FCCPC,” TNP cautioned, while also noting “interaction between the Commission’s regulatory powers and existing corporate governance requirements will require careful consideration to avoid unintended conflicts.”
Despite these concerns, the firm acknowledged that NIIRA 2025 represents one of the most transformative milestones in Nigeria’s insurance history, ushering in far-reaching reforms across capitalisation, governance, claims settlement, and compulsory insurance enforcement.
“The Reform Act 2025 marks a significant milestone in efforts to deepen market penetration and strengthen investor confidence in the sector. Its success, however, will depend on the Commission’s capacity to enforce consistent regulation, insurers’ commitment to compliance, and the ability to sustain public trust in insurance as a driver of economic growth,” the firm said.
It added that careful coordination between NAICOM, CAMA provisions, and the FCCPC’s competition oversight is essential to prevent unintended conflicts that could slow down the sector’s progress.
With the July 2026 deadline drawing closer, the recapitalisation exercise is set to become a defining moment for Nigeria’s insurance industry. NAICOM’s insistence on strict compliance signals a decisive shift towards a leaner, better-capitalised market, where scale, governance, and trust take precedence. How insurers respond in the coming months will determine not only their survival but also the industry’s capacity to play a more meaningful role in Nigeria’s economic transformation.
