Insurance firms that miss the July 2026 recapitalization deadline risk severe regulatory action, including merger or liquidation, the National Insurance Commission NAICOM has warned.
The commission would not think twice about taking action against non-compliant companies, according to a circular sent to all insurance and reinsurance companies in Nigeria by Deputy Commissioner (Technical), Dr. Usman Jankara.
According to the recently enacted Nigerian Insurance Industry Reform Act 2025, insurance companies must raise their capital to N10 billion for life insurance, N15 billion for non-life insurance, and N35 billion for reinsurance.
The circular stated: “Any company that fails to meet the prescribed MCR within the stipulated timeframe shall be subject to liquidation, merger, or any other regulatory resolution action as may be deemed appropriate by the Commission.”
“The successful insurance and reinsurance company shall be issued a new license by the commission upon fulfillment of the new MCR, payment of the requisite fees, and confirmation by the commission,” the circular stated.
Jankara stated that the new MCR takes effect from the date of Presidential assent, July 31, 2025, and insurers and reinsurers have been granted a 12-month opportunity to comply with the new standards.
The commission would publish thorough rules and circulars outlining the recapitalization exercise’s procedures, including the MCR’s composition, permissible capital forms, and capital verification protocols.
Encumbered assets, assets without perfected title or ownership, and assets not fully in the control of an insurer or reinsurer are all prohibited from meeting the MCR, according to the NAICOM deputy commissioner’s explanation of the asset recognition criterion. “Assets that do not meet the prescribed criteria or surpass prudential thresholds will also be considered inadmissible,” he continued.
In order to get incentives and concessions that could facilitate compliance and lower the exercise’s cost, NAICOM stated that it will interact with the appropriate authorities. In order to meet the new minimum capital requirements within the allotted 12-month timeframe, Jankara advised all insurance and reinsurance companies to start internal preparations, lay out a recapitalization plan, and act right now.
The commission’s warning makes it abundantly evident that it is committed to enforcing adherence to the new rules and bolstering Nigeria’s insurance sector. Insurers and reinsurers that fail to meet the recapitalisation deadline may face severe consequences, including liquidation or merger.
