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The National Insurance Commission (NAICOM), on Friday, announced a fresh recapitalisation exercise for insurance and reinsurance companies in Nigeria. Minimum capital for life underwriting firms now N10bn, non-life N15bn, composite firms N25bn, and reinsurance companies N35bn.
The Initiative was a fallout of the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which was assented to by President Bola Ahmed Tinubu recently.
NAICOM in a circular to insurance and reinsurance companies, titled: ‘Implementation of New Minimum Capital Requirement (MCR),’ dated August 12th, 2025, which was signed by the Deputy Commissioner for Insurance Technical, Dr. Usman J. Jankara stated: “Following the enactment of the NIIRA 2025 and assent of His Excellency President Bola Ahmed Tinubu, on the 31st of July 2025, the Commission hereby notifies all insurance and reinsurance companies of the commencement of the recapitalisation exercise as prescribed by the NIIRA 2025.”
The Commission In the circular said the new capital requirements to be introduced would be based on a risk-based model.
It further stated that based on the stipulations of the NIIRA 2025 on the introduction of higher MCR, it has pegged the new operating capital for insurance business operators at N10 billion as a minimum for Life Underwriting firms and N15 billion for non-life operators.
Additionally, the regulator pegged N25 billion for composite firms, that is those operating both life and non- business and N35 billion for reinsurance companies.
NAICOM emphasised that everything would be based on Risk-Based Capital (RBC) framework for both insurance and reinsurance companies in Nigeria.
According to the regulator, in line with the provisions of the Act, the new MCR takes effect from the date of Presidential assent, and all operators are required to comply fully within a 12-month period from the effective date.
The Commission however stated that a 12-month period has been provided for insurers and reinsurers to comply with the new MCR as well as the applicable RBC as may be determined, adding that all insurers and reinsurers shall comply with the requirements on or before the 30th day of July 2026.
On guidelines for the exercise, it stated: “The Commission shall, in due course, issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise.
“These shall include, but not be limited to: the composition of the MCR, acceptable forms of capital, procedures for capital verification, qualifying assets for MCR purposes, and criteria such as title, ownership, and existence, a standardised template for computation of MCR.”
On the treatment of assets regarding the exercise the Commission stated, “For the avoidance of doubt, insurers and reinsurers are hereby informed that encumbered assets, assets without perfected title or ownership, and assets not in the full possession of an insurer/reinsurer shall be inadmissible for the purpose of meeting the MCR.”
It added that assets that exceed prudential thresholds or do not meet the prescribed criteria shall also be deemed inadmissible.
On the verification of the assets, the Commission stated, “All assets for the purpose of the new MCR shall be subject to verification by the Commission or its appointed agents.
“In addition, where, due to the nature or circumstances of an asset, the Commission deems it necessary to undertake further verification beyond the norm, the cost of such non-standard verification shall be borne by the concerned insurer or reinsurer.”
On the issue of new certificates for firms that successfully cross the recapitalisation hurdle, the Commission stated: “Upon fulfilment of the new MCR, payment of the requisite fees and confirmation by the Commission, the successful insurance and reinsurance company shall be issued a new licence by the Commission.
“Any company that fails to meet the prescribed MCR within the stipulated time frame shall be subject to liquidation, merger, or any other regulatory resolution action as may be deemed appropriate by the Commission.” (AriseNews TV)
