Nigeria’s ongoing insurance recapitalisation is increasingly revealing more than balance-sheet strength. It is emerging as a stress test of the industry’s financial discipline, as regulators raise concerns over recurring weaknesses in financial disclosures, solvency computations and capital planning by some insurance companies.
With regulatory timelines tightening and tolerance for repeated corrections narrowing, the National Insurance Commission (NAICOM) has warned that persistent errors in financial statements could slow approvals and complicate the recapitalisation process under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The concerns were brought into focus at a one-day stakeholders’ session organised by the Nigerian Insurers Association (NIA) in collaboration with NAICOM, which convened finance, audit and compliance professionals from insurance firms alongside external auditors, actuaries and industry consultants. Rather than a routine engagement, the meeting reflected growing regulatory unease about the quality of financial information being submitted at a critical moment for the sector.
According to NAICOM, reviews of insurers’ audited financial statements have continued to reveal gaps in disclosures and weaknesses in reconciliation processes, particularly within the notes to accounts. These issues, regulators say, are not only technical shortcomings but structural weaknesses that undermine confidence in insurers’ preparedness for the new capital regime.
Gabriel Oloba, senior financial analyst in the Office of the Deputy Commissioner, Technical at NAICOM, said recurring errors in financial statements remain a major obstacle to efficient regulatory assessment. He noted that inconsistencies across disclosures, solvency calculations and supporting documentation frequently delay reviews and approvals, creating avoidable bottlenecks in an already compressed regulatory calendar.
Oloba stressed that the recapitalisation exercise has raised the stakes for financial reporting accuracy. Insurers, he said, must now demonstrate stronger internal controls, clearer reconciliations and full transparency in disclosures relating to capital adequacy. This includes strict alignment with existing frameworks such as the Minimum Capital Requirement, Risk-Based Capital model, Capital Adequacy Guidelines and the Solvency Control and Intervention Framework.
Beyond capital figures, regulators are increasingly focused on whether insurers’ numbers can be trusted. Inaccurate or incomplete disclosures, NAICOM warned, weaken regulatory confidence and raise questions about governance and risk management within firms seeking approval under the new regime.
This scrutiny is unfolding at a time when the industry is also adjusting to the post-implementation realities of International Financial Reporting Standard 17 (IFRS 17), which has fundamentally altered how insurance contracts are measured, recognised and disclosed. For regulators, the combination of IFRS 17 and recapitalisation has removed much of the flexibility that previously masked reporting weaknesses.
Oluwatoyin Charles, director of supervision at NAICOM, said the Commission remains committed to fostering a strong and stable insurance market but made it clear that financial integrity is now non-negotiable. She described the recapitalisation exercise under NIIRA 2025 as a defining moment for the industry, designed not only to strengthen solvency but also to enhance risk-bearing capacity and restore public confidence.
According to her, while many insurers have made visible progress towards meeting new capital thresholds, readiness must also be reflected in the quality of financial reporting and internal processes. “Financial integrity is not simply a standard, it is a promise,” she said, emphasising that every figure disclosed must be accurate, transparent and aligned with both local and global expectations.
Charles noted that IFRS 17 has elevated the responsibilities of chief financial officers, auditors and actuaries, whose roles are now more closely intertwined than ever. The credibility of the industry, she said, depends on how effectively these professionals work together to ensure that financial statements tell a clear and truthful story.
From the industry’s perspective, the engagement with regulators was seen as a corrective opportunity rather than a punitive exercise. Emmanuel Otitolaiye, chairman of the Accounting Technical Committee of the NIA, said the session was convened in response to issues identified during NAICOM’s review of insurers’ 2024 audited financial statements.
According to Otitolaiye, the objective was to ensure that insurers internalise regulatory feedback and apply the lessons learned to their 2025 accounts. Doing so, he said, would help reduce the volume of regulatory queries, limit repeated resubmissions and enable faster approvals at a time when both regulators and operators are under significant pressure.
He described the year as particularly demanding for the industry, given the scale of recapitalisation-related engagements and reforms underway. In such an environment, Otitolaiye noted, financial statements can no longer afford to be returned repeatedly for correction, as delays carry broader implications for corporate restructuring plans and regulatory timelines.
“This is not a year in which financial statements can afford to be returned repeatedly for correction. The luxury of time is limited, not only for NAICOM but also for the industry, given the numerous activities scheduled throughout the year,” Otitolaiye said.
As recapitalisation progresses, regulators and industry leaders appear aligned that capital alone will not carry insurers through this transition. The credibility of financial statements, the robustness of disclosures, and the discipline of internal reporting processes are now just as critical.
In an era of tighter oversight and reduced regulatory patience, Nigeria’s insurance recapitalisation is proving to be not only a test of financial strength, but a measure of how seriously the industry takes transparency, governance and long-term sustainability.
