An Open Letter To The Minister Of Finance

By Alh. Mohamed Kari

I write this as an open letter to you, deliberately choosing a public medium in the interest of total transparency. The matters surrounding regulatory compliance, market capitalisation, and financial stability in the Nigerian insurance sector affect not just a few boardroom executives, but the entire economic architecture of our nation. By placing these arguments in the public domain, it is my intention to ensure that National Insurance Commission (NAICOM) as the statutory regulator, the broad community of insurance operators, international reinsurers, and most importantly, the insuring public are fully aware of the principles at stake. Transparency is the bedrock of market discipline, and public scrutiny remains the best antidote to regulatory compromise.

I have had the unique privilege of serving as Managing Director of Nigeria Reinsurance Corporation (Nigeria Re.), Managing Director of NICON Insurance (NICON) and subsequently as the Commissioner for Insurance and Chief Executive of NAICOM. Having sat on both sides of the table; first leading these two flagship institutions and later regulating the entire sector; I possess a unique, deep, and unbiased vantage point on the structural mechanics of Nigerian insurance. It is precisely because of this singular background, free from commercial bias or political expedience, that I feel duty-bound as a deeply concerned stakeholder to address you directly on what the Insurance industry needs most: a truly level playing field.

If Nigeria is to refine and strengthen its insurance sector to compete globally, it needs more than just passing a piece of legislation, the market must operate under fair, transparent, and equal rules for every player. Regrettably, the current landscape is being distorted once more by a troubling and re-occurring pattern. As NAICOM enforces critical statutory reforms to strengthen the industry’s financial bedrock, NICON and Nigeria Re have once again approached your Ministry seeking political intervention to bypass regulatory requirements.

This resort to executive lobbying creates an uneven playing field. It penalises law-abiding operators while granting preferential exceptions to legacy institutions that have failed to adapt.

From pillars of capacity to a divided playing field

To understand why a fair market structure is essential, one must look at how these entities began. Established by the Federal Government in 1969 and 1977 respectively, NICON and Nigeria Re were created as the bedrock for domestic capacity. They were mandated to retain premium capital within Nigeria, underwrite public assets, build local expertise, and cushion the economy against systemic risk, which they did effectively.

Indeed, virtually most of the first, second, and third generations of insurance practitioners in Nigeria and to a large extent West Africa, either worked in these pioneer organisations or were directly trained by them. They served as the premier institutions of excellence and professional development for the entire industry. It is precisely because of this glorious legacy that it pains the industry so deeply today to watch these same organisations continue to retard the progress of the Nigerian Insurance industry.

Following the privatisation exercise of the mid-2000s, this proud heritage was severely eroded. Transferred under controversial circumstances to core investors associated with weak governance and excessive leverage, both entities gradually lost their market leadership. Over time, persistent governance failures, balance-sheet overhangs and unpaid claims fractured their operations, which required intervention at various intervals by NAICOM and Asset Management Corporation of Nigeria (AMCON),

Rather than allowing the market to refine itself through equal competition, legacy status has repeatedly been used as a shield against the very standards required of everyone else.

Equal rules for a maturing industry

Building a self-reliant, highly capitalised Nigerian insurance market requires consistent standards. Under the Nigerian Insurance Industry Reform Act (NIIRA) 2025 and NAICOM’s Minimum Capital Requirement Guidelines, the regulator established a framework to ensure all operators hold genuine financial backing to protect policyholders.

The central issue here is not whether statutory requirements feel inconvenient or demanding to any individual operator; financial regulations, by their very nature, impose rigorous demands. The fundamental question is simply this: are the rules applicable to everybody?

In a healthy market, the answer must be an unequivocal yes. The response from the broader industry demonstrates that compliance is achievable. Over 90% of operators have diligently followed the statutory process raising fresh capital, depositing required reserves in the Central Bank on Nigeria (CBN), undergoing verification, and settling regulatory fees, as required by the law. These institutions did not seek special exemptions; they invested heavy resources to comply with the law and earn their place in a modern financial sector.

In contrast, NICON and Nigeria Re continue to seek special dispensation through political channels, petitioning your Ministry to suspend regulatory directives, capital checks, and escrow requirements. When compliance is treated as mandatory for 90% of the market but optional for a selective few, the concept of statutory regulation collapses into favouritism. Allowing a handful of operators to play by a separate set of rules undermines the principles of fair competition and discourages the very investment needed to refine the market.

What obtains in other sectors: The precedent of regulatory discipline

Honourable Minister, one must ask a fundamental question: where else in Nigeria’s financial ecosystem does this happen? At no time do we witness such unhealthy behaviour in other regulated sub-sectors. When the CBN or the Pension Commission (PENCOM) announces recapitalisation deadlines or statutory capital increases for their regulated entities, we never see their executives running to the Federal Ministry of Finance to lodge complaints or seek political interventions to weaken the regulator’s hand.

Those operators understand that financial discipline is non-negotiable and that statutory requirements are enforced by the regulatory authority established by law, not negotiated through political patronage. Those models are best for financial regulation.

Why then should insurance operators treat regulatory compliance as a matter open to political lobbying? Why should the Ministry of Finance be patronised to intervene in pure regulatory enforcement? Allowing insurance companies to treat the Ministry as an informal court of appeal against NAICOM degrades the stature of Commission, promotes regulatory arbitrage, and projects an image of an industry that refuses to mature.

– Alh. Mohamed Kari (Wazirin Bauchi), former managing director, Nigeria Re, Former Managing Director, NICON and former commissioner for Insurance / CEO, NAICOM