The current dispute between the National Insurance Commission (NAICOM) and two insurance companies over the recently concluded insurance sector recapitalisation exercise has continued to raise dust in the industry, Daily Trust can report.
Daily Trust observes that as the recapitalisation exercise comes to an end with 50 insurance companies scaling the hurdles, the recapitalisation fees and other issues associated with the exercise have come to the front burner.
Daily Trust reports that two companies, linked to businessman and politician Jimoh Ibrahim, namely NICON Insurance Limited and Nigeria Reinsurance Limited have challenged the recapitalisation process in court after they were excluded from NAICOM’s list of the first 43 insurance and reinsurance companies that met the new minimum capital requirements
The companies have subsequently been placed under regulatory action following the cancellation of their operating licences.
This is as a result of NAICOM’s directive to insurance companies, as part of the recapitalisation process, to transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN), a move that NICON Insurance and Nigeria Reinsurance Corporation are challenging in court.
The insurance sector is a key player and component of Nigeria’s drive to $1 trillion and industry players say that the current fight between the regulator and two operators in the sector may threaten that drive.
Subsequently, NICON and Nigeria Re, on July 27, 2026 petitioned NAICOM over what they described as unlawful fees and regulatory demands arising from the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
Origin of dispute
Checks by Daily Trust showed that during a Senate plenary session in December 2024, Jimoh Ibrahim had argued against raising the minimum capital requirement for reinsurance companies to N35 billion.
He warned that the higher requirement could force some reinsurance companies out of Nigeria and increase the country’s dependence on foreign reinsurers.
‘N35 billion capital base, that’s completely out of order,’ Ibrahim said during the debate.
He argued that the proposed increase from N20 billion to N45 billion, as contained in the initial proposal before the Senate, was excessive and could weaken indigenous reinsurance capacity.
Ibrahim subsequently proposed retaining the existing N20 billion minimum capital requirement.
However, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru, defended the proposed increase.
Abiru said the capital requirement was part of a broader risk-based framework and noted that the initial proposal of N45 billion had already been reduced to N35 billion following discussions and public hearings.
NICON, Nigeria Re challenge recapitalisation requirements
The dispute escalated after NICON and Nigeria Re petitioned the Federal Government over aspects of NAICOM’s implementation of the recapitalisation exercise under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
Among the issues raised was NAICOM’s requirement for a 1% capital injection fee, alongside processing and verification charges contained in the Commission’s Minimum Capital Requirement Guidelines.
The companies also challenged NAICOM’s directive requiring operators to transfer their capital injection funds into an escrow account with the Central Bank of Nigeria (CBN).
They argued that the directive was inconsistent with Section 16(3) of NIIRA 2025, which provides for a 10% statutory deposit with the CBN.
NICON and Nigeria Re maintained that they had complied with the July 31, 2026 recapitalisation deadline by injecting N20 billion into NICON Insurance and N30 billion into Nigeria Re through Mudaraba Term Deposit accounts with Lotus Bank Limited.
According to the companies, the capital injections exceeded their adjusted requirements of N16 billion and N28 billion respectively.
They also said they had deposited N2.5 billion and N3.5 billion with the CBN in accordance with Section 16(3) of NIIRA 2025.
The two insurance companies accuse the National Insurance Commission of ‘unlawful’ and ‘unconstitutional’ monetary demands during the just concluded insurance sector recapitalisation.
Ministry of finance directs suspension of recapitalisation fees
Subsequently, The Federal Ministry of Finance had 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.
The directive was 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 Daily Trust, was received by NAICOM 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.
There should be no scared cow – Kari
Former Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Alhaji Mohammed Kari, has urged the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, to reject calls for regulatory concessions for companies that failed to meet the requirements of the recently concluded insurance industry recapitalisation exercise.
Kari, who is also a former Managing Director/Chief Executive Officer of NICON Insurance and Nigeria Reinsurance Corporation, said granting concessions to chronic regulatory defaulters could undermine discipline and create an uneven playing field in the insurance industry
He made the call in an open letter to the Minister of Finance, arguing that government intervention in the financial sector should be reserved for institutions whose failure poses a genuine systemic risk to the economy.
However, Kari argued that the circumstances of the two companies do not justify the government’s intervention.
According to him, while government intervention may be justified in exceptional circumstances to protect institutions considered ‘too big to fail’, such intervention should only apply where the failure of an institution could trigger wider economic consequences.
Kari said NICON Insurance and Nigeria Re no longer have the market dominance they once enjoyed, following years of decline and operational loss
‘Why then should the government intervene to shield operators whose distress carries no systemic consequence whatsoever?’ he queried.
Kari warned that granting regulatory concessions to companies that fail to meet the same requirements as compliant operators could distort competition in the market.
Kari further warned that regulatory concessions could affect investor confidence, arguing that both domestic and international investors require a predictable and transparent regulatory environment.
Kari further warned that regulatory concessions could affect investor confidence, arguing that both domestic and international investors require a predictable and transparent regulatory environment.
He also linked regulatory discipline to policyholder protection, stressing that capital and other regulatory requirements are designed to ensure that insurers remain capable of meeting their obligations and paying claims when losses occur.
‘Regulatory standards exist primarily to guarantee that when disaster strikes, claims are paid promptly,’ he stated, warning that shielding insolvent entities could expose policyholders to greater risk.
The recapitalisation exercise was undertaken pursuant to the minimum capital requirements established under NIIRA 2025, alongside other applicable laws and guidelines issued by NAICOM.
NAICOM has now completed the 12-month insurance industry recapitalisation exercise, confirming 50 insurance and reinsurance companies as compliant with the new minimum capital requirements.
Under the new framework, non-life insurers are required to maintain a minimum capital of N15 billion, life insurers N10 billion, composite insurers N25 billion and reinsurers N35 billion.
Nigeria Re subsequently became the first insurance operator to lose its licence following the conclusion of the recapitalisation exercise.
The Commission also appointed Dr Muiz Banire (SAN) as Receiver and Provisional Liquidator to oversee the winding up of Nigeria Re’s affairs.
Managing Director of AIICO Insurance and Deputy Chairman of Nigerian Insurance Association (NIA), Mr. Babatunde Fajemirokun in an interview said the recapitalisation process was transparent.
According to him, insurance is fundamental and foundational to achieving a one trillion dollar economy.
‘Insurance de-risks economic activities. So individuals, businesses cannot invest, expand and also take productive risk. Secondly it mobilises long term capital. I believe that with the recapitalisation, companies are now able to settle claims more efficiently,’ he said in an interview.