NAICOM Highlights Challenges to Recapitalisation

Ebere Nwoji

The National Insurance Commission (NAICOM) has highlighted challenges and hitches to successful recapitalisation in insurance industry despite its efforts to deliver smooth, successful and conclusive recapitalisation exercise by July 30th 2026.

The commission highlighted these challenges: as complexities associated with merger and acquisition among operating firms who might not make it on stand-alone basis, macro-economic volatilities in form of inflation and foreign exchange fluctuations which has impacted capital raising as well as capacity gaps.

The Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, stated these at the ‘EY Insurance Summit’ on the Nigerian Insurance Industry Reform Act (NIIRA) 2025 held Thursday in Lagos.

Omosehin, who was represented at the summit by the Deputy Commissioner for Insurance Technical, Usman Jankara  however gave an update on the preparations and steps so far taken by the commission to ensure compliance and delivery of successful recapitalisation  exercise this time saying: We have issued guidelines and circulars such as the policy circular and then guidelines on Minimum Capital Requirement (MCR) detailing admissible and non-admissible assets, liabilities, and compliance timelines.”

He said the commission has issued order for mandatory submission of recapitalisation plans, adding that all insurers and reinsurers submitted their plans by September 30 deadline. He said the plans were reviewed and the outcome conveyed to the affected companies. He said the commission currently has issued order for compulsory monthly progress reporting.

He said as part of its regulatory oversight, the commission has set up a dedicated recapitalisation committee that monitors compliance, reviews monthly returns, and engages stakeholders continuously.

“Capital Verification Framework: to guarantee integrity, NAICOM partnered with the big four audit firms including EY for independent verification of compliance with the minimum capital.

Speaking further on the preparation for the recapitalisation, Jankara said to ensure credibility, transparency, and confidence in the process, the commission has set up an escrow account where funds raised for recapitalisation should be deposited.

According to him, the escrow account is with the Central Bank of Nigeria.

He further informed that guidelines on reinsurance have also been issued, adding: ”We have also issued exposure drafts of guidelines for registration and renewals, as well as guidelines for foreign or international health insurance & reinsurance providers, for operators’ and stakeholders’ comments and inputs.

He further said additional guidelines currently in the works include guidelines on product development and sale, suitability and Fit-and-proper for principal officers, with others to follow such as guidelines on claims management, takaful operations, and microinsurance.

On the progress so far achieved, the Deputy Commissioner for Insurance said industry response has been encouraging with a significant number of insurers having indicated readiness for capital verification.

“Boards have approved strategies for fresh capital injection, mergers, and operational restructuring. “The Commission has completed reviews of recapitalisation plans and issued feedback to institutions, he informed”.

He however said capital alone did not equal capability adding that underwriting expertise and risk management frameworks were essential.

“NAICOM’s approach remains principle-based; providing clarity and certainty while enabling innovation within a safe and sound regulatory environment”, he stated.