The National Insurance Commission NAICOM has set all insurance and reinsurance companies on the race course and finish bracing the tape of Minimum Capital Requirement set by the Nigerian Insurance Industry Reform Act (NIIRA) 2025 not later than 30th July 2026 as specified in the Act. The countdown started from the date of President Bola Ahmed Tinubu accent on 31st July 2025
The Commission released circular stated that the commencement of the recapitalisation exercise as prescribed by the NIIRA 2025 is already days after accent and accompanying this is applicable Risk-Based Capital (RBC) as may be determined .The now higher Minimum Capital Requirements (MCR) of N10billion, N15billion, N25billion and N35billion for life, non-life, composite and reinsurance companies respectively combines with a shift to a Risk-Based Capital (RBC) framework for insurance and reinsurance companies in Nigeria.
Raising hope and dousing skeptics NAICOM assure the insurance industry and all stakeholders that the implementation of the new MCR, including the verification and confirmation processes, shall be conducted in a transparent, fair, and value-adding manner. The objective it emphasised 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.
The statement by the Deputy Commissioner Technical Dr, Usman Jankara, said in due course, comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise shall be issued. To ease the burden of compliance the Commission will engage with relevant regulators such as SEC, CAC, NRS, and stakeholders with a view to securing, where possible, appropriate incentives and concessions that may ease compliance and reduce the cost of the exercise.
There are clear dos and don’ts, insurers and reinsurers are informed that: encumbered assets, assets without perfected title or ownership, and assets not in the full an insurer/reinsurer shall be inadmissible for the purpose of meeting the MCR. Also, assets that exceed prudential thresholds or do not meet the prescribed criteria shall also be deemed inadmissible.
On assets for the purpose of the new MCR the Commission appoint verifying 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.
The regulator stated that the successful insurance and reinsurance company shall be issued a new licence. Any company that fails to meet the prescribed MCR within the stipulated timeframe, the circular cleared shall be subject to liquidation, merger, or any other regulatory resolution action as may be deemed appropriate by the Commission.
