NAICOM ramps up recap checks as insurers miss key disclosure

The National Insurance Commission (NAICOM) has signalled plans to intensify regulatory scrutiny of insurance companies as they grapple with compliance challenges linked to ongoing recapitalisation requirements.

The Commission raised concerns over persistent errors in financial disclosures, solvency computations, and inadequate recapitalisation plans submitted by some insurers, warning that such lapses could delay approvals and regulatory assessments.

These were key takeaways at one-day stakeholders’ session organised by the Nigerian Insurers Association (NIA), in collaboration with the National Insurance Commission (NAICOM), which brought together finance, audit, and compliance personnel of insurance companies, external auditors, actuaries, and industry consultants.

Speaking during the event Gabriel Oloba, senior financial analyst in the Office of the Deputy Commissioner for Technical,  NAICOM, identified recurring errors in financial statements submitted by insurers.

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He noted that gaps in disclosures and reconciliation processes, particularly within the notes to financial statements, remain a major concern and often delay regulatory reviews and approvals.

Oloba urged insurers to prioritise accuracy, consistency and strict adherence to reporting standards, stressing that improved financial reporting quality would enable faster regulatory assessment and approvals.

He also called on operators to ensure full disclosure of all relevant information relating to the new capital regime in line with existing frameworks, including the Minimum Capital Requirement (MCR), Risk-Based Capital (RBC), Capital Adequacy guidelines, and the Solvency Control and Intervention Framework (SCIF).

Also speaking, Cyprain Amadi, NAICOM’s deputy director of Supervision, outlined critical compliance issues surrounding the ongoing recapitalisation exercise, including timelines, capital verification procedures, recapitalisation options and capital computation processes.

He emphasised the need for insurers to develop comprehensive recapitalisation plans and maintain regular progress reporting to demonstrate compliance with regulatory expectations.

Amadi expressed concern over several deficiencies observed among operators, including the absence of structured recapitalisation strategies, inaccuracies in solvency calculations, and failure by some composite insurers to clearly define capital-raising targets for their various business lines.

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He stressed that the submission of accurate and detailed monthly progress reports is vital to achieving the objectives of the recapitalisation programme, describing the initiative as a key reform designed to strengthen the financial capacity of insurers, enhance market stability, and improve the Nigerian insurance industry’s global competitiveness.

Emmanuel Otitolaiye, chairman of the Accounting Technical Committee of the Nigerian Insurers Association (NIA), in his welcome remarks emphasised the importance of continuous collaboration as a critical mechanism for ensuring regulatory compliance within the industry and preventing infractions that could delay the timely approval of audited financial statements.

He further expressed appreciation to the Commission for its consistent support in providing guidance and for fostering open engagement with industry stakeholders to promote a clearer understanding of regulatory requirements.

He said, “The importance of this programme cannot be overemphasized, as it provides an opportunity for us to learn directly from NAICOM based on the review of the 2024 financial statements submitted by the industry.”

Modestus Anaesoronye is a leading Nigerian financial journalist with over two decades of experience reporting on the insurance and pension sectors across Nigeria and West Africa. He has held key editorial positions at major national media outlets, including The Comet, The Nation, and Financial Standard, and currently serves as a Senior Financial Analyst at BusinessDay Media Ltd.

A widely travelled reporter, he has covered industry developments in more than 14 countries across Africa and Asia.

Anaesoronye is a multiple award-winning journalist, honoured several times as Insurance Journalist of the Year and Pension Journalist of the Year by recognised industry bodies, including PensionScope and the Pension Fund Operators Association of Nigeria (PenOp), among others.

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