The National Insurance Commission (NAICOM) has issued a stern warning to insurance and reinsurance companies to fully comply with the new recapitalisation requirements introduced under the Nigeria Insurance Industry Reform Act (NIIRA) 2025 or face severe sanctions, including liquidation or forced mergers in the country.
The warning followed the signing of the NIIRA 2025 into law by President Bola Ahmed Tinubu recently. The law, which aims to strengthen the resilience and stability of the insurance sector, mandates significant increases in the minimum capital requirement (MCR) for operators and introduces the risk-based capital (RBC) framework.
Under the new regime, life insurers are required to raise their capital base to N10 billion, non-life insurers to N15 billion, composite insurers to N25 billion and reinsurers to N35 billion.
The recapitalisation exercise, which took effect from July 31, 2025, has given operators a 12-month compliance window.
In an official circular, the commission stressed that any company that fails to meet the new capital thresholds within the stipulated timeframe will be subjected to regulatory intervention.
“Any company that fails to meet the prescribed MCR within the stipulated time frame shall be subject to liquidation, merger, or any other regulatory resolution action as may be deemed appropriate by the commission,” the regulator stated.
The implementation of the NIIRA 2025 is expected to enhance the financial soundness of insurers, protect policyholders, and build confidence in the Nigerian insurance market.
The adoption of the RBC framework is also designed to ensure that operators hold capital commensurate with the risks they underwrite.
Industry analysts predict that the recapitalization exercise could trigger a wave of mergers and acquisitions as smaller players struggle to meet the steep capital requirements.
This development, they argue, may lead to a leaner but stronger insurance industry capable of meeting its obligations and competing effectively in a rapidly evolving financial landscape.
It reaffirmed its commitment to strict enforcement of the provisions, urging operators to commence the recapitalization process immediately to avoid regulatory sanctions.
