NAICOM Begins Recapitalisation as NIIRA 2025 Increases Capital Floor

By Oluwakemi Kindness

The National Insurance Commission (NAICOM) has announced the commencement of a sweeping recapitalisation exercise for insurance and reinsurance companies in Nigeria.

This follows the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, signed into law by President Bola Ahmed Tinubu on July 31, 2025.

Under the new law, the Minimum Capital Requirements (MCR) have been significantly raised to ₦10 billion for life insurers, ₦15 billion for non-life insurers, ₦25 billion for composite insurers, and ₦35 billion for reinsurance companies.

The reforms also introduce a Risk-Based Capital (RBC) framework aimed at strengthening the financial soundness of the sector.

NAICOM in a statement on Friday says the new requirements take immediate effect from the date of presidential assent, giving operators a 12-month compliance window ending July 30, 2026.

Companies that fail to meet the new capital thresholds risk regulatory actions, including liquidation, merger, or other resolution measures.

The Commission adds that it will issue detailed guidelines on the recapitalisation process, covering acceptable forms of capital, asset qualification criteria, capital verification procedures, and computation templates.

It warned that encumbered assets, assets without perfected titles, or those exceeding prudential thresholds will not count toward meeting the MCR.

All qualifying assets will be subject to verification, with additional costs for non-standard checks borne by the concerned operators.

Upon fulfilling the requirements and paying necessary fees, compliant firms will receive new operating licences from the Commission. NAICOM also pledged to engage other regulators, such as the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC), to explore incentives that could ease the cost of compliance.

Deputy Commissioner (Technical), Dr. Usman J. Jankara, assures stakeholders that the exercise will be conducted in a transparent and value-driven manner to bolster public confidence in the insurance sector.

An in-house committee has been set up to oversee the process.

“All insurance and reinsurance companies are required to commence internal preparations and take immediate steps to comply with the new requirements within the stipulated 12-month period,” NAICOM states