NAICOM building
By David Akinmola
The National Insurance Commission (NAICOM) has released a circular directing all insurance and reinsurance companies in Nigeria to commence full implementation of the new Minimum Capital Requirement (MCR) as stipulated in the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The regulatory directive marks a significant milestone in the ongoing efforts to strengthen the financial resilience of the insurance sector and enhance policyholder protection. According to NAICOM, the new capital thresholds aim to improve solvency, promote stability, and restore public confidence in the industry.
Under the new regime, designed to increase solvency and rebuild public trust, mandates steep capital thresholds of N10 billion. N15 billion, N25 billion and 35 billion for life, non-life, composite and reinsurance companies, respectively and a shift to a Risk-Based Capital (RBC) framework for insurance and reinsurance companies in Nigeria.
The circular, addressed to all operators and signed by the Commissioner for Insurance, emphasised strict compliance within the stipulated timelines. NAICOM warned that failure to meet the new requirement could result in regulatory sanctions, including suspension of licenses or market exit.
The Commission stated that the recapitalisation exercise will be implemented in phases to allow operators adequate time to shore up their capital through various options such as mergers, acquisitions, rights issues, or fresh equity injection.
NIIRA 2025, recently signed into law, introduces the most comprehensive reforms in the Nigerian insurance industry in decades, focusing on solvency, digital transformation, and improved consumer protection. NAICOM reiterated its commitment to ensuring a transparent and orderly recapitalisation process that safeguards the interest of policyholders and investors alike.
