Following the earlier consent of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 and passage into law by President Bola Ahmed Tinubu, insurance companies nationwide have been given a 12-month deadline to recapitalise, LEADERSHIP learnt.
The new Act sets a new capital threshold, which means that Life insurance firms are to increase their capital from N2 billion to N10 billion, non–life insurance from N3 billion to N15 billion, and Reinsurance companies from N10 billion to N35 billion, translating to about 500 per cent capital raise.
The NIIRA 2025, Capital Requirements (Part IV) Section, Subsection 6 of the New Act cited by LEADERSHIP yesterday said: “An insurer registered before the commencement of this Act shall comply with the requirements within 12 months of the commencement of this Act.”
Invariably, insurers and reinsurance companies have until the end of July 2026 to comply with this provision unless the National Insurance Commission (NAICOM) decides to extend the deadline or grant a waiver or concession.
The NAICOM also constituted a 2025 Recapitalisation Committee, following President Bola Ahmed Tinubu’s assent to the Nigeria Insurance Industry Reform Act (NIIRA) 2025, on Tuesday.
Chaired by the director of Supervision, Oluwatoyin Charles, the Committee’s primary responsibility is to oversee the implementation of the recapitalisation programme. This includes ensuring compliance with revised capital requirements and promoting transparency and integrity in sourcing and verifying capital inflows.
The commissioner for Insurance, Olusegun Ayo Omosehin, emphasised the critical role of recapitalisation in stabilising the industry and contributing to Nigeria’s $1 trillion economy vision during the Committee’s inauguration in Abuja on Tuesday. He urged the 11-member Committee to approach their task with professionalism, diligence, and commitment to the common interest, assuring them of necessary support.
Some of the key terms of reference for the Committee include developing a recapitalisation roadmap by creating a detailed plan for the commission and the insurance industry, developing guidelines and circulars on recapitalisation, recommending the composition of minimum capital requirements, and identifying incentives and concessions that may be obtained from other regulatory authorities.
The Committee will submit monthly progress reports to management and provide quarterly updates to the Governing Board and stakeholders, even as NAICOM is confident that the Committee will successfully deliver on its mandate, shaping the future of Nigeria’s insurance sector.
Explaining what qualifies as minimum capital requirement for an existing company to recapitalise, the Act states that “the excess of admissible assets over liabilities, less the amount of own shares held by the firm; subordinated liabilities subject to approval by the commission (NAICOM) and any other financial instrument as may be prescribed by the commission.”
In the Act, the regulator threatened to cancel the registration of any insurer or reinsurer who fails to satisfy the provisions of Capital Requirements as they relate to the categorisation of operation of such insurer or reinsurer, adding that it will only give 30 days’ grace after the expiration of the deadline, after which it will publish the list of all insurers that have complied with the provision of this section.
Section 15 of the Act states that: (1) A person shall not carry on insurance business in Nigeria unless the insurer has and maintains the minimum capital, in the case of (a)non-life insurance business, the higher of (i) N15,000,000,000.00 or (ii)risk-based capital determined by the commission (b) life assurance business, the higher of (i) N10,000,000,000.00 or (ii) risk-based capital determined by the Commission and ( c) reinsurance business, the higher of (i) N35,000,000,000.00 and (ii) risk-based capital determined by the Commission.
While LEADERSHIP exclusively learnt that some underwriters have increased their capital to the new benchmark even before the Act, others who have yet to do so will have to firm up their recapitalisation process before the deadline or risk regulatory hammer.
To this end, the Nigerian Insurers Association (NIA) chairman, Kunle Ahmed, said the Act is a pivotal legislation that sets the stage for transformative progress across the insurance ecosystem and the broader financial services landscape.
Ahmed, who is also the managing director/CEO, AXA Mansard Insurance Plc said: “As a leading voice of the industry, the Nigerian Insurers Association pledges its full support toward the successful implementation of the NIIRA Act. We are dedicated to facilitating sector-wide understanding and adoption of the Act’s provisions, engaging our member companies and stakeholders through capacity-building, advocacy, and technical support, partnering with regulators to ensure seamless execution and compliance and promoting innovation and inclusion, in line with the legislation’s goals.
“This is not just a legislative victory but a shared mission. NIA stands ready to champion a more resilient and customer-centric insurance sector that contributes meaningfully to national development,” he said.
For his part, the managing director/CEO of Universal Insurance Plc, Dr. Jeff Duru, added that the new law would encourage mergers and acquisitions that ensure companies are financially sound and can carry on their civic duties and responsibilities as expected.
According to him, this development will allow some foreign investors to come into the country to acquire critical stakes, thereby strengthening the industry’s ability to compete globally, especially for big-ticket risk businesses in the oil and gas, maritime, and aviation sectors.
He expects companies to start approaching the public soon to raise funds for recapitalisation in a move to meet the stipulated deadline.
Earlier, the president, Nigerian Council of Registered Insurance Brokers (NCRIB), Prince Babatunde Oguntade, told LEADERSHIP that he expects the new law to make insurance companies stronger through recapitalisation that will usher in more expertise and funding needed for the industry to compete favourably in the global market while making them competitive in risk businesses, such that some risks ceded abroad due to low capacity can be retained locally.
He expressed belief that development will also revolutionise the insurance broking profession, adding that the new Act ensures seamless and ethical business operations between brokers and underwriters while sanctioning charlatans operating in the insurance industry.
