NAICOM Holds Firm on 2026 Recapitalisation Deadline
By Patience Ikpeme
The National Insurance Commission (NAICOM) has sent a clear signal to operators in the country’s insurance sector, stating that the July 30, 2026, deadline for the ongoing recapitalisation exercise remains absolute.
This position is rooted in the fact that the timeline is now a statutory requirement under the newly enacted Nigerian Insurance Industry Reform Act (NIIRA) 2025.
Dr. Usman Jankara, the Deputy Commissioner for Insurance (Technical), acting on behalf of the Commissioner for Insurance and Chief Executive of NAICOM, Mr. Olusegun Omosehin, made this known during a specialized seminar for journalists focused on the provisions of the NIIRA 2025.
According to Dr. Jankara, the Commission is legally bound by the dates set within the new framework. He explained that any shift in the timeline would necessitate a rigorous legislative process, including a return to the National Assembly for an amendment of the Act and subsequent presidential assent.
“NAICOM does not intend to pursue extension,” Dr. Jankara said, adding that the “deadline date is 30 July 2026.”
The recapitalisation exercise is designed to address the significant erosion of the industry’s capital base caused by persistent inflation and the declining value of the Naira. Previous thresholds, ranging between ₦2 billion and ₦5 billion, are now viewed as inadequate for meeting modern risks.
Under the NIIRA 2025, the minimum operating thresholds, described by the regulator as “the floor,” have been significantly adjusted. Non-life insurers are required to maintain a minimum of ₦15 billion, while Life insurers must reach ₦10 billion. Reinsurance companies face the highest requirement at ₦35 billion.
The regulator expressed optimism that these changes will lead to stronger, better-managed, and financially robust companies. The objective is to eliminate marginal or weak operators and encourage strategic mergers to ensure the industry possesses the capacity to meet its long-term obligations.
The Commission confirmed that the recapitalisation programme is already in full swing, with an in-house committee overseeing the process. Guidelines have been issued, and all insurance firms are required to submit comprehensive recapitalisation plans, which are subject to monthly monitoring and status reporting.
Currently, the Commission is engaged in the verification of claims made by companies asserting they have already met the new requirements. To ensure the highest level of transparency, NAICOM is collaborating with the “Big Four” audit firms—KPMG, Deloitte, EY, and PwC—to validate capital assets and investments.
“No insurance company has yet been officially verified as compliant,” the Commission noted, making it clear that all entities, regardless of their size, must pass through the same rigorous compliance scanner.
A major highlight of the new Act is the establishment of the Insurance Policyholders Protection Fund (IPPF). This fund serves a purpose similar to the Nigeria Deposit Insurance Corporation (NDIC) in the banking sector but with a more versatile mandate.
The IPPF is designed to settle obligations to policyholders if an insurer becomes insolvent. Notably, the fund can intervene even while a company is still operating but showing signs of distress, combining the protective roles of the NDIC and the Asset Management Corporation of Nigeria (AMCON).
Funding for the IPPF will come from the industry itself, with companies contributing 0.25% of their gross premium income annually. These contributions will continue until the fund reaches 25% of the industry’s total gross premium, at which point further levies will be paused. Although NAICOM sits on the management committee, the fund is owned by the industry to ensure collective stability and public trust.
To address the perennial issue of delayed claims, Section 210 of the NIIRA 2025 introduces a deterrent-based penalty regime. Companies that fail to settle claims promptly will face fines payable to the regulator and will be charged monthly compound interest at prevailing bank rates on the delayed amounts.
The Act also moves away from the fixed penalties of the past, adopting a flexible sanction framework based on the principle of “disgorgement.” This ensures that any financial benefit an operator gains from an infraction is fully recovered, in addition to further penalties intended to prevent a recurrence.
By implementing these measures, NAICOM aims to restore confidence in the insurance sector and correct the negative public perception often associated with company failures and unpaid claims.
