•Regulator rules out extension, mum on recapitalised firms

Nigerian insurers that have failed to meet the new recapitalisation requirements face possible licence loss as the July 31, 2026 deadline set by the National Insurance Commission (NAICOM) expires today.

The Commissioner for Insurance/Chief Executive Officer of the Commission, Mr. Olusegun Omosehin, has ruled out any further extension of the deadline, leaving operators that have not met the prescribed minimum capital requirements with limited options.

To further clarify the rationale behind the exercise, the NAICOM chief said the new minimum capital requirement is aimed at enhancing insurers’ claims-paying capacity, strengthening their balance sheets, increasing domestic risk retention and preparing the industry for the transition to a risk-based capital regime.

Under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, life insurers are required to have at least N10 billion, non-life insurers N15 billion, composite insurers N25 billion, while reinsurers must maintain N35 billion.

NAICOM has warned that companies unable to meet the requirements could face regulatory action, including liquidation, merger or other resolution measures deemed appropriate by the commission. Despite concerns over the number of operators that may still be below the threshold, NAICOM has yet to publicly disclose the latest number of companies that have successfully completed the recapitalisation process.

This is fuelling uncertainty across the industry as the deadline takes effect.

However, there are growing calls from industry operators for NAICOM to grant an extension as they argue that many insurance firms are struggling to raise the funds needed to meet the new capital requirements.

According to stakeholders, raising funds at the capital market has been very challenging for the insurers because their recapitalisation happened after the banks did theirs and have ‘mopped up funds’.

Nonetheless, Daily Sun learned eight insurance companies have approached the capital market to raise fresh funds, while several others are negotiating mergers and acquisitions to avoid losing their operating licences.

Industry estimates show insurers need over N1 trillion in fresh capital to comply with the new rules.

The recapitalisation exercise comes amid high interest rates, foreign exchange volatility and tight liquidity, making it difficult for many firms to attract investors.

Many operators, it was further gathered, are looking outside Nigeria to cement partnerships that will bail them out.

Experts who confided in Daily Sun noted that merger talks are still on the table across boardrooms with a view to meeting the deadline and ultimately avoiding losing their operational licenses.

“We commend operators that have made significant progress in raising capital, engaging investors, strengthening governance and submitting for the Commission’s verification process.

“However, the deadline is not symbolic; it is regulatory and the industry must treat it with the urgency it deserves,” he said.

Emphasising accountability, the Commissioner assured stakeholders that the Commission would conduct the exercise in a transparent, fair and firm manner, stressing that every operator must demonstrate financial soundness, regulatory compliance and operational readiness to move the industry forward”, the NAICOM chief said recently. (The Sun)

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