The Federal Ministry of Finance has directed the National Insurance Commission (NAICOM) to suspend the enforcement of disputed fees and capital transfer requirements imposed on NICON Insurance Limited and Nigeria Reinsurance Corporation (Nig Re) pending the determination of a petition challenging the demands.

The directive followed a petition submitted by the two insurance companies over aspects of the ongoing recapitalisation exercise under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.

In a letter dated August 6, 2026 and signed by the Permanent Secretary, Finance, Raymond Omachi, on behalf of the Minister of Finance and Coordinating Minister of the Economy, the ministry asked NAICOM to provide a detailed response and legal justification for the demands being challenged by the companies.

The ministry also directed the insurance regulator to put on hold the enforcement of the disputed processing fees, the one per cent capital injection fee and directives requiring the companies to transfer their entire capital injection funds into an escrow account with the Central Bank of Nigeria (CBN).

The letter, addressed to the Commissioner for Insurance, said the ministry had received a petition dated July 27, 2026, from NICON Insurance Limited and Nigeria Re concerning the recapitalisation process.

According to the ministry, the companies are challenging what they described as a demand for a one per cent capital injection fee, additional processing and verification charges and the requirement to transfer their recapitalisation funds into an escrow account at the CBN.

The petitioners claimed that the fees demanded from them amounted to N305 million for NICON and N375 million for Nig Re.

The companies also questioned the directive requiring existing insurance operators to transfer their entire capital injection funds into an escrow account at the CBN, arguing that this went beyond the 10 per cent statutory deposit requirement provided under Section 16(3) of NIIRA 2025.

The ministry said the petitioners had raised “notable grievances” against the Commission and requested NAICOM to explain the legal basis for the disputed charges and directives.

The development comes amid the insurance industry’s ongoing efforts to meet new minimum capital requirements introduced under the government’s insurance sector reform programme.

The companies told the ministry that they had already met their adjusted recapitalisation requirements before the July 31, 2026 deadline.

According to the petition, NICON had injected N20 billion into a Mudaraba Term Deposit account with Lotus Bank Limited, while Nig Re had injected N30 billion.

The companies said these amounts were above their respective adjusted capital requirements of N16 billion and N28 billion.

They further stated that they had deposited N2.5 billion and N3.5 billion respectively with the CBN in compliance with Section 16(3) of NIIRA 2025.

The petitioners also disclosed that they had made initial payments of N80 million and N75 million in fees.

The dispute therefore centres on whether the companies should make additional payments and transfer the full amounts of their capital injection funds into the CBN escrow arrangement after already meeting the applicable recapitalisation requirements.

The Finance Ministry, in its directive, asked NAICOM to provide a detailed response to the issues raised and furnish the legal justification for the Commission’s position.

“Pending the determination of the petition, the Commission should suspend the enforcement of the contested processing fees, 1% capital injection fee demands, and full-capital escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Corporation,” the letter stated.

The directive places the disputed measures on hold while the ministry examines the complaints and the regulatory basis for the charges and fund-transfer requirements.

The petition also raises broader questions about the implementation of the new insurance capital regime, particularly the financial obligations placed on existing operators seeking to comply with the recapitalisation exercise.

The companies’ position is that they have already committed funds substantially above their adjusted capital requirements and have also met the statutory deposit obligation with the CBN.

The ministry’s intervention does not, however, amount to a final determination of the dispute. Rather, it requires NAICOM to respond to the complaints and justify its actions while the petition is being considered.

The outcome could have implications for other insurance companies participating in the recapitalisation exercise, particularly if the issues surrounding the one per cent capital injection fee, additional processing charges and escrow requirements extend beyond the two companies that filed the petition.

The latest development also places renewed attention on the need for clear and consistent interpretation of the provisions of NIIRA 2025 as the government seeks to strengthen the financial capacity of Nigeria’s insurance industry.

For NICON and Nig Re, the immediate relief is the suspension of enforcement of the disputed requirements while their petition is being determined. NAICOM is now expected to explain the legal basis for the charges and the directive on the transfer of capital injection funds before the matter is resolved. (The Nation)

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