The National Insurance Commission NAICOM has notified all insurance and reinsurance companies of the commencement of the recapitalisation exercise as prescribed by the Nigerian Insurance Industry Reform Act (NIIRA) 2025 following the enactment of the Reform Act and assent of President Bola Ahmed Tinubu on the 31st of July 2025.
NAICOM in a circular to all insurance and reinsurance companies in the country disclosed that the NIIRA 2025 introduces higher Minimum Capital Requirements (MCR) of N10billion, N15billion, N25billion and N35billion for life, non-life, composite and reinsurance companies respectively and a shift to a Risk-Based Capital (RBC) framework for insurance and reinsurance companies in Nigeria. In line with the provisions of the Act, the new MCR takes effect from the date of Presidential assent, and all operators are required to comply fully within a twelve (12) month period from the effective date.
“All insurers and reinsurers shall comply with the requirements on or before the 30th day of July 2026,” according to the circular signed by Dr Usman Jankara, Deputy Commissioner (Technical) of NAICOM.
The Commission also disclosed it shall, in due course, issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise.
On the treatment of Assets, the circular was clear that Encumbered assets, assets without perfected title or ownership, and assets not in the full possession of an insurer/reinsurer shall be inadmissible for the purpose of meeting the MCR. It also stated that Assets that exceed prudential thresholds or do not meet the prescribed criteria shall also be deemed inadmissible.
All assets for the purpose of the new MCR shall be subject to verification by the Commission or its appointed agents and upon fulfilment of the new MCR, payment of the requisite fees and confirmation by the Commission, the successful insurance and reinsurance company shall be issued a new licence by the Commission. 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 Commission said it will engage with relevant regulators such as SEC, CAC, NRS, etc and stakeholders with a view to securing, where possible, appropriate incentives and concessions that may ease compliance and reduce the cost of the exercise. It assured the insurance industry and all stakeholders that the implementation of the new MCR, including the verification and confirmation processes, shall be conducted in a transparent, fair, and value-adding manner. “The objective is to strengthen the financial soundness of the industry, enhance public confidence, and ensure that the benefits of the NIIRA 2025 accrue to the Nigerian people”.
NAICOM said an in-house Committee has been established to oversee, coordinate, guide, monitor, and implement the recapitalisation exercise across the insurance industry. All insurance and reinsurance companies are required to commence internal preparations, outline recapitalization plan, engage proactively and take immediate steps to comply with the new minimum capital requirements within the stipulated 12-month period.
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