Integrity of Capital Verification is ‘Non-Negotiable,’ NAICOM Tells Insurers
By Patience Ikpeme
The National Insurance Commission (NAICOM) has declared that the transparency and integrity of the Minimum Capital Requirement (MCR) verification exercise for insurance companies are absolutely vital to the Nigerian financial system.
The Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, made the statement at the EY Insurance Summit on the Nigerian Insurance Industry Reform Act (NIIRA) 2025, laying out a firm roadmap for the sector’s transformation.
Mr. Omosehin confirmed that NAICOM is instituting a stringent, independent process for the capital verification, which involves a collaboration with top global accounting firms.
“This is why we are partnering with the Big 4 firms to conduct independent verification of the MCR of all insurance companies,” the Commissioner stated. Comparing the exercise to a critical security check, he explained, “What we are doing is akin to the scanner at airports. Every entity must pass through the scanner to validate compliance with the MCR.”
He maintained that the involvement of these independent auditors is central to building trust within the market. “Our partnership with the Big 4 firms ensures independent validation of compliance with the MCR in line with extant laws and regulations. This collaboration is a cornerstone of investor confidence and market credibility,” Omosehin said.
The Commissioner revealed that the industry has shown positive signs of preparing for the capital raise. “Industry response has been encouraging with a significant number of insurers have indicated readiness for capital verification. Boards have approved strategies for fresh capital injection, mergers, and operational restructuring. The Commission has completed reviews of recapitalization plans and issued feedback to institutions,” he said.
Looking beyond the current exercise, Omosehin clarified that the recapitalisation effort is merely the first step. He described it as “the foundation, not the finish line.” Immediately after the successful completion of the MCR exercise and the licensing of compliant insurers, NAICOM will begin the implementation of the Risk-Based Capital (RBC) Framework.
Omosehin noted that the RBC Framework “is already concluded and will soon be re-exposed for stakeholder comments.” He added that an RBC Toolkit for analysis is nearing completion and will be used for computations. This framework, he explained, “will align capital requirements with the risk profile of each institution, encouraging prudent risk management and capital allocation.”
The NAICOM boss addressed the complexities introduced by the new global accounting standard, IFRS 17, and the increasing demand for specialized skills. “The implementation of IFRS 17 introduces new complexities in valuation and reporting. Actuaries will play a critical role in pricing compulsory insurance, assessing liability valuations, supporting RBC computations and enhancing NAICOM’s regulatory data collection and analytics infrastructure.”
He announced that the Commission is finalizing arrangements to engage an Actuary to strengthen these critical areas and support industry-wide actuarial capacity development.
NAICOM set clear expectations for all stakeholders involved in the reform process. For Insurance and Reinsurance Companies, the Commission expects full compliance with MCR timelines and guidelines, transparent reporting and prompt submission of monthly progress returns, the adoption of sound risk management frameworks and investment in technology for operational efficiency, and a commitment to prompt claims settlement and customer-centric practices.
Actuarial Firms and Professionals are required to support insurers in IFRS 17 implementation, liability valuation, and RBC readiness, provide robust pricing models for compulsory insurance and emerging risks, and collaborate with NAICOM to strengthen industry-wide actuarial capacity.
Auditing Firms (including EY) must ensure integrity and independence in capital verification exercises, uphold global best practices in governance, risk, and compliance audits, and provide advisory support for ESG integration, digital transformation, and AfCFTA readiness.
Finally, Other Stakeholders like Brokers, Technology Partners, and Investors are expected to drive innovation in distribution and customer engagement, invest in Insurtech solutions and data analytics capabilities, and collaborate with NAICOM to deepen insurance penetration and financial inclusion.
The Commissioner acknowledged persistent challenges, including complexities around mergers and acquisitions (M&A), macroeconomic volatility affecting capital raising, and critical capacity gaps in underwriting expertise. Despite this, he stated that the current NAICOM management is “fully committed to working with all stakeholders” to transform the sector’s narrative. “Our shared goal is a sector that is resilient, innovative, and globally competitive,” he affirmed.
Omosehin concluded by stressing that the strategic vision extends beyond regulatory adherence. This vision is founded on key pillars, including the adoption of Digital Transformation (leveraging Insurtech and AI), ESG Integration (embedding sustainability principles), exploiting AfCFTA Opportunities to compete regionally, and integrating Data and Analytics to build local risk models for emerging risks like climate change and cyber threats.
“Our goal is not compliance for its own sake, but resilience and competitiveness,” he concluded.
