Allow Regulators Enforce Insurance Rules, Expert Advises Federal Govt

A former commissioner for Insurance and chief executive officer of the National Insurance Commission (NAICOM), Alhaji Mohamed Kari, has appealed the federal government to uphold regulatory discipline and ensure a level playing field in Nigeria’s insurance industry.

Kari warned that political interference in regulatory enforcement could undermine investor confidence, weaken competition and threaten financial stability in the sector.

He made the call in an open letter to the minister of Finance and coordinating minister of the Economy.
Kari urged the ministry to resist attempts by insurance operators to secure political concessions against statutory regulatory requirements.

The former managing director of Nigeria Reinsurance Corporation and NICON Insurance, argued that the strength of Nigeria’s economy depended, among other factors, on transparent, consistent and predictable financial regulations.

He insisted that statutory requirements must apply equally to all insurance operators, irrespective of ownership, historical status or political influence.

According to him, the ongoing enforcement of recapitalisation and other regulatory requirements by NAICOM presents an opportunity to strengthen the financial foundation of the insurance industry and enhance protection for policyholders.

Kari expressed concern over what he described as repeated attempts by NICON and Nigeria Re to seek intervention from the Ministry of Finance to circumvent regulatory requirements.

He said granting such intervention would create an uneven competitive environment where companies that complied with the law would be disadvantaged, while non-compliant operators received preferential treatment.

“Where compliance is treated as mandatory for 90 per cent of the market but optional for a selective few, the concept of statutory regulation collapses into favouritism,” he stated.

He noted that more than 90 per cent of insurance operators had complied with the statutory process for raising fresh capital, meeting reserve requirements, undergoing verification and paying regulatory fees.

He questioned why some operators should be granted special exemptions after other companies had committed significant resources to meeting the same requirements.

Kari acknowledged the historical importance of NICON and Nigeria Re, which were established by the Federal Government in 1969 and 1977 respectively.

He described the two institutions as former pillars of Nigeria’s insurance industry, noting that they played significant roles in developing domestic insurance capacity, retaining premium capital within the country, underwriting public assets and training generations of insurance professionals.

However, he said the institutions subsequently suffered years of governance challenges, financial difficulties, declining market share and operational shrinkage, leading to interventions by NAICOM and the Asset Management Corporation of Nigeria (AMCON).

Kari maintained that their historical significance should not be used as justification for exempting them from current regulatory standards.

He also questioned the rationale for political intervention in insurance regulation, noting that operators in other segments of the financial sector generally comply with directives issued by their statutory regulators.

According to him, the Central Bank of Nigeria (CBN) and the National Pension Commission (PenCom) enforce capital and other regulatory requirements without allowing regulated institutions to turn the Ministry of Finance into an informal avenue for appealing regulatory decisions.

He argued that the same principle should apply to the insurance industry.

Kari further cited provisions of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, particularly Section 8, subsections 6 and 9, arguing that the law provides procedures to be followed where an insurance operator’s licence is cancelled without assigning the Ministry of Finance the role of an appellate authority over NAICOM.

He therefore urged the Finance Minister to allow NAICOM to exercise its statutory responsibilities without political interference.

The former NAICOM boss acknowledged that the government could intervene where the failure of a financial institution posed a genuine systemic risk to the wider economy.

However, he argued that the current circumstances of NICON and Nigeria Re did not constitute such a threat, given their reduced market footprints compared with their historical positions.

Kari warned that granting regulatory concessions to non-compliant operators could have wider implications for the economy, including unfair competition, weakened incentives for recapitalisation, reduced investor confidence and increased risks to policyholders.

He stressed that regulatory requirements were ultimately designed to protect policyholders and ensure that insurance companies possessed sufficient financial capacity to meet their obligations, particularly when disasters occurred.

“The Federal Government must resist the urge to grant special carve-outs or act as an informal court of appeal for failing operators,” he said.

Kari urged the Ministry of Finance to demonstrate its commitment to financial discipline by supporting the independence and statutory authority of NAICOM.

He said consistent enforcement of regulations would send a positive signal to domestic and international investors, insurers and reinsurers that Nigeria remained committed to building a transparent, competitive and credible financial system.