…Act empowers NAICOM to issue risk based capital to insurers
Harboursandport.com:
Lagos – August 18, 2025: 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 of N10 billion from
N2 billion stipulated in the old law. Non life firms must have N15 billion
capital from N3 billion, while reinsurance companies must have N35 billion
capital 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.
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| Commissioner for Insurance, Olusegun Omosehin |
Section 15(1) of the NIIRA states thus: “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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