NAICOM to withdraw insurance licenses over capitalization status

•Constitutes recapitalisation committee

By Rosemary Iwunze

Following the signing into law of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, the National Insurance Commission, NAICOM, has been mandated to cancel registration of any insurance or reinsurance firm that fails to recapitalise within one year.

The NIIRA 2025 stipulates that life insurance firms must have capital base of N10 billion increased from N2 billion stipulated in the old law. Non-life firms are expected to have N15 billion capital, a raise from N3 billion, while reinsurance companies must have N35 billion capital up from N10 billion.

The NIIRA also empowers NAICOM to mandate companies to increase minimum capital to an amount higher than the minimum specified if it considers it appropriate.

Section 15(1) of the NIIRA states: “A person shall not carry on insurance business in Nigeria unless the insurer has and maintains, while carrying on that business, a minimum capital, in the case of – (a) non-life insurance business, the higher of N15,000,000,000, or risk-based capital determined by the Commission; (b) life assurance business, the higher of N10,000,000,000, or risk-based capital determined by the Commission; and reinsurance business, the higher of N35,000,000,000, or risk-based capital determined by the Commission.

“(6)An insurer registered before the commencement of this Act shall comply with the requirements within 12 months of the commencement of this Act.”

The NIIRA further states: “The Commission shall cancel the registration of any insurer or reinsurer that fails to satisfy the provisions of subsection (1) as it relates to the category of operation of such insurer or reinsurer.

“Where the Commission considers it appropriate, having regard to the nature, size and complexity of the insurance business carried on or proposed to be carried on by an insurer, and to the insurer’s risk profile, the Commission may issue a directive – (a) requiring the insurer to increase its minimum capital to an amount higher than the minimum specified in this section or the regulations made under this section; or (b) increasing the minimum capital requirements applicable to an insurer to a higher sum than that specified in this section or the regulations made under this section.”

Meanwhile, the Commission has constituted an 11 member Recapitalisation Committee, Chaired by the Director of Supervision, NAICOM, Oluwatoyin Charles, with primary responsibility  to oversee the implementation of the recapitalisation programme. This includes ensuring compliance with revised capital requirements and promoting transparency and integrity in sourcing and verifying capital inflows.

The commissioner for Insurance, Olusegun Ayo Omosehin, emphasised the critical role of recapitalisation in stabilising the industry and contributing to Nigeria’s $1 trillion economy vision during the Committee’s inauguration in Abuja.

He urged the 11-member Committee to approach their task with professionalism, diligence, and commitment to the common interest, assuring them of necessary support.

Some of the key terms of reference for the Committee include developing a recapitalisation roadmap by creating a detailed plan for the commission and the insurance industry, developing guidelines and circulars on recapitalisation, recommending the composition of minimum capital requirements, and identifying incentives and concessions that may be obtained from other regulatory authorities.

The Committee will submit monthly progress reports to management and provide quarterly updates to the Governing Board and stakeholders, even as NAICOM is confident that the Committee will successfully deliver on its mandate, shaping the future of Nigeria’s insurance sector.

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