Insurance recapitalisation fees raise dust

The current dispute between the National Insurance Commission (NAICOM) and two insurance companies over the recently concluded insurance sector recapitalisation exercise has continued to raise dust in the industry, Daily Trust can report. Daily Trust observes that as the recapitalisation exercise comes to an end with 50 insurance companies scaling the hurdles, the recapitalisation fees and other issues associated with the exercise have come to the front burner. Daily Trust reports that two companies, linked to businessman and politician Jimoh Ibrahim, namely NICON Insurance Limited and Nigeria Reinsurance Limited have challenged the recapitalisation process in court after they were excluded from NAICOM’s list of the first 43 insurance and reinsurance companies that met the new minimum capital requirements The companies have subsequently been placed under regulatory action following the cancellation of their operating licences. This is as a result of NAICOM’s directive to insurance companies, as part of the recapitalisation process, to transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN), a move that NICON Insurance and Nigeria Reinsurance Corporation are challenging in court. The insurance sector is a key player and component of Nigeria’s drive to $1 trillion and industry players say that the current fight between the regulator and two operators in the sector may threaten that drive. Subsequently, NICON and Nigeria Re, on July 27, 2026 petitioned NAICOM over what they described as unlawful fees and regulatory demands arising from the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.   Origin of dispute Checks by Daily Trust showed that during a Senate plenary session in December 2024, Jimoh Ibrahim had argued against raising the minimum capital requirement for reinsurance companies to N35 billion. He warned that the higher requirement could force some reinsurance companies out of Nigeria and increase the country’s dependence on foreign reinsurers. “N35 billion capital base, that’s completely out of order,” Ibrahim said during the debate. He argued that the proposed increase from N20 billion to N45 billion, as contained in the initial proposal before the Senate, was excessive and could weaken indigenous reinsurance capacity. Ibrahim subsequently proposed retaining the existing N20 billion minimum capital requirement. However, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru, defended the proposed increase. Abiru said the capital requirement was part of a broader risk-based framework and noted that the initial proposal of N45 billion had already been reduced to N35 billion following discussions and public hearings.   NICON, Nigeria Re challenge recapitalisation requirements The dispute escalated after NICON and Nigeria Re petitioned the Federal Government over aspects of NAICOM’s implementation of the recapitalisation exercise under the Nigerian Insurance Industry Reform Act (NIIRA) 2025. Among the issues raised was NAICOM’s requirement for a 1% capital injection fee, alongside processing and verification charges contained in the Commission’s Minimum Capital Requirement Guidelines. The companies also challenged NAICOM’s directive requiring operators to transfer their capital injection funds into an escrow account with the Central Bank of Nigeria (CBN). They argued that the directive was inconsistent with Section 16(3) of NIIRA 2025, which provides for a 10% statutory deposit with the CBN. NICON and Nigeria Re maintained that they had complied with the July 31, 2026 recapitalisation deadline by injecting N20 billion into NICON Insurance and N30 billion into Nigeria Re through Mudaraba Term Deposit accounts with Lotus Bank Limited. According to the companies, the capital injections exceeded their adjusted requirements of N16 billion and N28 billion respectively. They also said they had deposited N2.5 billion and N3.5 billion with the CBN in accordance with Section 16(3) of NIIRA 2025. The two insurance companies accuse the National Insurance Commission of “unlawful” and “unconstitutional” monetary demands during the just concluded insurance sector recapitalisation.   Ministry of finance directs suspension of recapitalisation fees Subsequently, The Federal Ministry of Finance had directed the National Insurance Commission (NAICOM) to suspend the enforcement of contested capital injection fees and escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Corporation (Nigeria Re), pending the determination of a petition filed by the two firms. The directive was contained in a letter dated 6th August, 2026, and referenced F/LEG/0608/2026/22, addressed to the Commissioner for Insurance, NAICOM, and signed by the permanent secretary, Finance, Raymond Omachi, for the Minister of Finance

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