Joy Agwunobi
The National Insurance Commission (NAICOM) has directed all insurance and reinsurance companies in Nigeria to meet new capital requirements by July 30, 2026, marking the beginning of a comprehensive recapitalisation exercise under the recently signed Nigerian Insurance Industry Reform Act (NIIRA) 2025.
In a circular issued to operators and signed by Usman Jankara, the deputy commissioner (Technical), NAICOM (Ref: NAICOM/CFI/DCT/NIIRA2025-RECAP/001), the regulator confirmed that the 12-month compliance window begins from July 31, 2025, the date on which the NIIRA 2025 received presidential assent.
Under the new law, insurers will be required to operate under significantly higher Minimum Capital Requirements (MCRs),Life insurance companies must hold a minimum of N10 billion, non-life operators are required to maintain N15 billion, composite insurers will be expected to meet N25 billion, while reinsurance companies face the highest threshold of N35 billion.
The framework also introduces a Risk-Based Capital (RBC) regime, which shifts regulatory emphasis from mere capital size to the adequacy of capital relative to each insurer’s risk profile.
The Commission states that it shall, in due course, issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise. These shall include, but not limited to: The composition of the MCR; acceptable forms of capital; procedures for capital verification;qualifying assets for MCR purposes and criteria such as title, ownership, and existence; and a standardised template for computation of MCR.
For the avoidance of doubt, NAICOM emphasized that insurers and reinsurers must note that encumbered assets, assets without perfected title or ownership, as well as those not in the full possession of an insurer or reinsurer, will be deemed inadmissible in meeting the Minimum Capital Requirement (MCR). The Commission further clarified that any assets exceeding prudential thresholds or failing to meet prescribed criteria will equally be considered inadmissible.
NAICOM further stated that all assets presented for the purpose of meeting the new Minimum Capital Requirement (MCR) will be subject to verification by the Commission or its appointed agents. The regulator added that in cases where the nature or circumstances of an asset require additional scrutiny beyond the standard process, the cost of such non-routine verification will be borne by the concerned insurer or reinsurer.
According to NAICOM, insurers and reinsurers that meet the new MCR within the stipulated timeframe, settle requisite fees, and secure Commission confirmation will be issued fresh operating licences. Companies that fail to comply, however, risk regulatory interventions including liquidation, forced mergers, or other resolution measures deemed necessary to protect policyholders and industry stability.
The Commission also disclosed that it will collaborate with relevant regulators, including the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), and the Nigerian Registrar of Ships (NRS), among others, as well as key industry stakeholders, to explore possible incentives and concessions that could ease compliance and reduce the overall cost of the exercise.
NAICOM assured operators and the investing public that the recapitalisation programme will be implemented in a transparent, fair, and value-adding manner. It stressed that the overarching goal of the reform is to strengthen the financial soundness of insurers, enhance policyholder protection, and restore public confidence in the Nigerian insurance industry.
To ensure smooth execution, the Commission has already set up an in-house Committee to coordinate and monitor the recapitalisation process across the sector. NAICOM urged insurance and reinsurance firms to immediately commence internal assessments, craft recapitalisation strategies, and proactively align with the new requirements.
“The Commission is committed to ensuring a successful implementation of the recapitalisation exercise,” the statement read, adding that operators must not wait until the last minute to adjust to the stricter capital regime.
