NAICOM To Release Risk-Capital Framework In October

The National Insurance Commission (NAICOM), said it will release a new framework in October to review the size of risk portfolios held by insurance companies in relation to their capital levels under the Minimum Capital Requirement (MCR) regime.

The Commissioner for Insurance, Mr Olusegun Ayo Omosehin, disclosed this on Friday in Lagos during a press briefing to give an update on the just-concluded recapitalisation exercise in the insurance industry under the Nigerian Insurance Industry Reform Act NIIRA 2025.

Omosehin explained that the MCR represents the least capital an insurance entity is permitted to hold, and that companies with large risk exposures would be required to match them with appropriate levels of capital.

“We will then begin to look at the size of the portfolio of risk an entity holds in relation to the capital that they have. The Minimum Capital Requirement. The minimum is the least an entity can have,” he said.

According to him, depending on the size of an insurer’s portfolio, an entity holding a huge amount of risk would need to match it with adequate capital.

He added that some insurance companies might need to seek additional capital once the parameters and framework are established.

“So there might be entities that would now need to even, having set the parameters and the framework, that might then need to look for additional capital, where possible, and that process is already on,” he said.

The commissioner disclosed that NAICOM had appointed Ernst & Young, EY, Actuaries to work with the Commission on developing the framework.

He said the appointment was announced to the market a couple of months ago, and that the framework was almost completed.

“That’s EY Ernst and Young Actuaries. They are working with us, so the framework is almost completed, and we are hoping we can release this to the market on or before first of October, where people can make appropriate comments,” Omosehin said.

He noted that substantial work was already ongoing, alongside further engagement with operators in the insurance market.

The Commissioner emphasised NAICOM’s willingness to collaborate with insurers throughout the process, saying that “but the most important thing for you to note is the fact that we are happy to work with our operators in this process.”