Meet recapitalisation target or face liquidation, NAICOM warns insurers

The National Insurance Commission (NAICOM) has warned insurance and reinsurance companies across Nigeria that failure to meet the July 2026 recapitalisation deadline will attract strict regulatory action, including forced merger, liquidation, or other sanctions.

In a circular addressed to all operators, the Deputy Commissioner (Technical), Dr. Usman Jankara, stated that the commission would not hesitate to act against any company that fails to comply with the new regulatory standard.

New Capital Requirements Under the 2025 Reform Act

The newly signed Nigerian Insurance Industry Reform Act 2025 has introduced fresh Minimum Capital Requirements (MCR) for players in the sector. The new benchmarks are as follows:

• Life Insurance Companies – ₦10 billion

• Non-Life Insurance Companies – ₦15 billion

• Reinsurance Companies – ₦35 billion

According to NAICOM, companies that successfully meet these requirements — alongside payment of the required fees and subsequent verification — will be issued new operating licences.

Timeline for Compliance

The Act, signed into law on July 31, 2025, gave insurance and reinsurance companies a 12-month window to meet the new MCRs. This means firms must fully comply by July 2026.

NAICOM confirmed it will issue further guidelines to operators, covering:

• The composition of acceptable capital

• Procedures for capital verification

• Detailed modalities for the recapitalisation process

Criteria for Asset Recognition

The commission also outlined strict rules on asset recognition. The following will not count towards meeting the new MCR:

• Encumbered assets

• Assets without perfected ownership titles

• Assets not in the full possession of insurers or reinsurers

• Assets that exceed prudential thresholds or fail to meet prescribed standards

Engagement and Support

NAICOM has assured operators that it will engage with other regulators to provide incentives and concessions aimed at easing compliance and reducing the financial burden of recapitalisation.

Dr. Jankara further urged insurance companies to:

• Begin internal preparations immediately

• Develop clear recapitalisation plans

• Take proactive steps to meet the deadline within the 12-month period

Stronger Industry Ahead

The commission emphasised that this recapitalisation exercise is designed to strengthen the Nigerian insurance industry, boost financial soundness, and enhance public confidence in the sector.

Non-compliant companies, however, risk being liquidated, merged, or subjected to other regulatory resolutions after July 2026.