NAICOM Issues New Guidelines for Insurance Capitalization
By Patience Ikpeme
The National Insurance Commission (NAICOM) has released new guidelines on the implementation of the recently assented Nigerian Insurance Industry Reform Act (NIIRA) 2025, which introduces a new minimum capital requirement (MCR) for insurers and reinsurers.
The circular, issued on Friday, specifies that certain assets will be considered inadmissible for meeting the new capital thresholds.
According to the new rules, assets that are “encumbered,” without a perfected title, or not in the full possession of an insurer or reinsurer will not be counted toward the MCR. The same applies to assets that exceed prudential thresholds or do not meet prescribed criteria.
Yhe Commission stated that all assets will be subject to verification by NAICOM or its appointed agents. If a non-standard verification is necessary due to the nature of an asset, the cost will be the responsibility of the concerned company.
The new law, which President Bola Ahmed Tinubu assented to on July 31, 2025, sets higher MCRs and a shift to a Risk-Based Capital (RBC) framework. The new capital requirements are N10 billion for life insurance companies, N15 billion for non-life insurers, N25 billion for composite companies, and N35 billion for reinsurance firms.
All insurance and reinsurance companies have a 12-month period to comply with the new MCR. The deadline for compliance is July 30, 2026. Companies that successfully meet the new requirements, pay the requisite fees, and receive confirmation from NAICOM will be issued a new license. However, those that fail to comply within the stipulated timeframe will be subject to liquidation, merger, or other regulatory actions.
NAICOM stated that the objective of the new regulation is to “strengthen the financial soundness of the industry, enhance public confidence, and ensure that the benefits of the NIIRA 2025 accrue to the Nigerian people.”
To achieve this, an in-house committee has been established to oversee the recapitalization process. The Commission is also set to engage with other regulators and stakeholders to secure incentives and concessions that may ease the compliance process and reduce costs.
In the circular, NAICOM urged all insurance and reinsurance companies to begin internal preparations, outline a recapitalization plan, and take immediate steps to meet the new requirements.
The Commission said it is committed to ensuring that the verification and confirmation processes are “transparent, fair, and value-adding.”
It will also issue comprehensive guidelines on the modalities for the exercise, including acceptable forms of capital and procedures for verification.
