The National Insurance Commission (NAICOM) has released the guidelines for the Minimum Capital Requirement (MCR) of insurance and reinsurance companies, directing operators to submit their current compliance status on 2024 audited financial statements and second quarter (Q2) returns as at 30th June 2025 – in line with approved template.
In a circular dated September 8, 2025 themed, ‘Guidelines on Minimum Capital Requirement for Insurance and Reinsurance Companies’ signed by Oluwatoyin Charles, director, Supervision Directorate for the Commissioner for Insurance, NAICOM released the template on composition of the MCR as provided in the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The commission in the directive, said, “An insurer shall determine its MCR status as at 2024 Audited Financial Statements and 2nd Quarter Returns as at 30th June 2025 using the Template for the computation of the MCR.”
Other datelines in the circular include: submission of recapitalisation plan on or before 30th September 2025; monthly progress reports to come 10 working days after month-end; capital verification exercises to commence from 1st November 2025 upon notification of compliance with MCR and shall be concluded not later than 30th June 2026.
The regulator said all directives arising from capital verification exercise shall be complied with not later than 30th June 2026, while submission of evidence of payment of statutory deposit to CBN shall be on or before 30th May 2026. Also, the final compliance deadline, being 12 months from the effective date of NIIRA 2025, shall be 30th July 2026.
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On what constitutes the MCR, the commission said it shall be ‘Admissible Assets less Admissible Liabilities.’
“The MCR as prescribed in Section 15(5) of the NIIRA 2025 is the excess of admissible assets over liabilities, less the amount of own shares held by the insurer.”
The admissible assets, according to NAICOM, shall consist of: cash and bank balances, tenured deposits with financial institutions; government bonds, treasury bills, corporate bonds (quoted), commercial papers, quoted equities, loans to policyholders, reinsurance assets, premium receivables, investment properties (at lower of cost or fair value and not more than 25 percent of MCR) and statutory deposits, among others.
According to NAICOM, admissible liabilities shall include: Insurance contract liabilities, reinsurance contract liabilities, investment contract liabilities, trade payables, borrowings, lease liabilities, among others.
NAICOM said part of the recapitalisation plan to be submitted before the end of this month include: Board resolution on how to comply with the relevant provisions of this guidelines and extant insurance laws; capital status of the insurer as at 2024 audited financial statements and 2nd quarter returns as at 30th June 2025, short fall in the statutory deposit with CBN; detailed action plan on the amount(s) and source(s) of capital injection(s) with timelines and deliverables.
For the recapitalisation, life insurance is expected to raise N10 billion or risk-based capital; non-life insurance, N15 billion or risk-based capital; while reinsurance is N35 billion or risk-based capital.
