The National Insurance Commission (NAICOM) has announced the commencement of the recapitalisation exercise for all insurance and reinsurance companies in Nigeria, following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The Act, signed into law by President Bola Ahmed Tinubu on July 31, 2025, introduces higher Minimum Capital Requirements (MCR) and a shift to a Risk-Based Capital (RBC) framework for operators in the sector.
Under the new provisions, the MCR has been set at: ₦10 billion for life insurance companies
₦15 billion for non-life companies
₦25 billion for composite companies
₦35 billion for reinsurance companies
The new requirements took effect immediately after presidential assent, with a 12-month compliance period ending July 30, 2026.
NAICOM said it will issue detailed guidelines and circulars outlining the recapitalisation process, including:
Composition of the MCR, Acceptable forms of capital, Capital verification procedures, Qualifying assets and criteria such as title, ownership, and existence, Standard templates for MCR computation.
The Commission emphasised that encumbered assets, assets without perfected title, or those not fully in the possession of an insurer or reinsurer will be inadmissible for meeting the MCR. Assets exceeding prudential thresholds or failing to meet set criteria will also be excluded.
All assets declared for MCR purposes will be subject to verification by NAICOM or its appointed agents, with non-standard verification costs borne by the concerned operator.
Regulatory Actions and Licensing
Companies that meet the MCR and pay the necessary fees will be issued new licences. Those that fail to comply within the stipulated timeframe risk liquidation, merger, or other regulatory actions deemed appropriate.
NAICOM said it also plans to work with other regulators and stakeholders, including the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), and National Registry Services (NRS), to explore incentives and concessions to ease compliance.
The Commission assured stakeholders that the recapitalisation process will be transparent, fair, and aimed at strengthening the financial stability of the industry, boosting public confidence, and ensuring Nigerians benefit from the reforms.
Adding that An in-house committee has been set up to oversee, coordinate, and monitor the exercise across the sector.
NAICOM urged all insurance and reinsurance companies to begin internal preparations, develop their recapitalisation plans, and take immediate steps to meet the new requirements within the 12-month period.
