Finance Ministry Halts NAICOM’s Recapitalisation Fees, Escrow Directive Against NICON, Nigeria Re

The Federal Ministry of Finance has directed the National Insurance Commission (NAICOM) to suspend the enforcement of contested capital injection fees and escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Corporation (Nigeria Re), pending the determination of a petition filed by the two firms.

This is contained in a letter dated 6th August, 2026, and referenced F/LEG/0608/2026/22, addressed to the Commissioner for Insurance, NAICOM, and signed by the permanent secretary, Finance, Raymond Omachi, for the Minister of Finance and Coordinating Minister of the Economy.

The letter seen by LEADERSHIP, was received at NAICOM’s Commissioner’s Office on 7th August, 2026.

According to the letter, the Ministry said it received a petition dated 27th July, 2026, from NICON and Nigeria Re over the ongoing recapitalisation exercise being carried out under the Nigerian Insurance Industry Reform Act (NIIRA), 2025.

The letter stated that the two insurance firms raised two major grievances against the Commission.

First, the companies alleged that NAICOM assessed and demanded a one per cent Capital Injection Fee, along with additional processing and verification fees, pursuant to Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines.

According to the Ministry, these demands amounted to N305 million for NICON and N375 million for Nigeria Re.

Secondly, the ministry noted that the firms accused NAICOM of directing existing, operational insurance entities to transfer their entire capital injection funds into an escrow account at the Central Bank of Nigeria (CBN), instead of the 10 per cent statutory deposit requirement prescribed under Section 16(3) of NIIRA 2025.

The subject of the letter described the fees as constituting “an illegal fee of one per cent of the capital injection,” an additional N180 million as “a questionable capitalisation charge,” and the escrow directive as “unconstitutional,” on the grounds that it violates Section 16(3) of the new Insurance Act.

The Ministry noted that the petitioners contended they had already complied with the statutory recapitalization deadline of 31st July, 2026.

Per the letter, NICON injected N20 billion and Nigeria Re injected N30 billion into Mudaraba Term Deposit accounts with Lotus Bank Limited, figures both companies say exceed their adjusted capital requirements of N16 billion and N28 billion respectively.

The two firms also said they had separately deposited N2.5 billion and N3.5 billion with the CBN in line with Section 16(3) of NIIRA 2025, and had made initial fee payments of N80 million and N75 million to the Commission.

Following the allegations, the Ministry asked NAICOM to “provide a detailed response and legal justification regarding the issues raised.”

The Ministry also directed that, pending the determination of the petition, the Commission should suspend enforcement of the contested processing fees, the one per cent capital injection fee demands, and the full-capital escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Corporation.

The dispute is coming on the heels of the ongoing industry-wide recapitalisation exercise mandated by the Nigerian Insurance Industry Reform Act (NIIRA), 2025, which set new minimum capital thresholds for insurance and reinsurance companies operating in Nigeria, with a compliance deadline of 31st July, 2026.