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Insurance Companies in Nigeria are waiting on the National Insurance Commission’s (NAICOM’s) pronouncement on what constitute the new capital requirement as directed in the recently enacted Insurance Industry Reform Act (NIIRA) 2025.
According to them, the pronouncement will also spell out timeline, which Board and Management of insurance companies will need to make key decisions on how to comply with the new capital requirement
“We need the information to first of all know the time frame for the exercise, and secondly what constitute the capital, one of the insurance CEO’s said in a telephone chat.
According the CEO, who do not want his name mentioned, said, “at the moment we don’t know whether it is only the shareholders fund, or other items like retained earnings, reserve or, other investments in fixed income assets like bond and treasury bills.”
Following the enactment of NIIRA 2025 by president Bola Tinubu, insurance companies in Nigeria have been mandated to go through a recapitalisation exercise, with Life insurance moving from N2 billion to N10 billion; Non-life insurance moving from N3 billion to N15 billion; and Reinsurance Companies moving from N10 billion to N35 billion.
Read also: NAICOM innaugurates 11-member committee to oversee insurance recapitalisation
Industry regulator, NAICOM on Tuesday constituted 11-Member Committee for the 2025 Recapitalization exercise, which will be chaired by Oluwatoyin Charles, director of Supervision at NAICOM.
The Committee’s primary responsibility according to the Commission is to oversee the implementation of the recapitalisation program, including ensuring compliance with revised capital requirements and promoting transparency and integrity in sourcing and verifying capital inflows.
Olusegun Ayo Omosehin, commissioner for Insurance in a statement emphasized the critical role of the recapitalization in stabilizing the industry and contributing to Nigeria’s $1 trillion economy vision.
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 includes -Develop a Recapitalization Roadmap by creating a detailed plan for the Commission and the insurance industry; Develop guidelines and circulars on recapitalization; Recommend the composition of Minimum Capital Requirements; Identify incentives and concessions that may be obtained from other regulatory authorities.
The Committee will submit monthly progress reports to NAICOM and provide quarterly updates to the Governing Board and stakeholders.
NAICOM is confident that the Committee will successfully deliver on its mandate, shaping the future of Nigeria’s insurance sector, Omosehin said.
The Committee’s success is vital to the industry’s stability and growth, and NAICOM looks forward to collaborating with all stakeholders to achieve this objective. With the NIIRA 2025, NAICOM aims to position the insurance industry for greater transparency, innovation, and global competitiveness, aligning with the Federal Government’s vision of achieving a $1 trillion economy.
