50% remittance to govt stunting deposit insurance fund, says NDIC

The National Insurance Commission (NAICOM) has insisted that there will be no extension of the ongoing recapitalisation deadline in the insurance industry, stating that the timetable is fixed by law and cannot be altered.

This was disclosed by the Nigeria Deposit Insurance Corporation (NDIC), which stated that the mandatory remittance of 50 per cent of its earnings to government coffers is constraining its ability to adequately build the Deposit Insurance Fund needed to effectively respond to bank failures.

NAICOM’s Deputy Commissioner for Insurance (Technical), Dr Usman Jankara, who represented the Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, at a seminar for insurance journalists in Abuja yesterday, made the commission’s position clear during a question-and-answer session.

He said, “I would like to state unequivocally that the recapitalisation deadline will not be extended. The basic reason is this: it is the law.” According to him, any change would necessitate a new legislative process and presidential approval.

“Once it’s the law, nobody has the power to extend what the law has indicated as a deadline. If you need to do that, you would need to go back to the National Assembly, get that section amended, and get Mr President’s assent. It is not a journey we’re willing to embark on,” he added.
Jankara said the deadline contained in the Nigerian Insurance Industry Reform Act 2025 remains July 30, 2026, insisting that serious operators should be able to comply.

“We believe that the deadline as clearly highlighted by Nigeria Internet Registration Association (NIRA) is doable, it is reasonable, and it is something serious players within the insurance sector will be able to meet within that time frame,” he said. He expressed confidence that the process would result in a stronger industry.

THE Managing Director/Chief Executive of NDIC, Thompson Sunday, made this known during a courtesy visit to the Managing Director/Chief Executive of the Ministry of Finance Incorporated (MOFI), Dr Armstrong Takang, as part of NDIC’s post-assumption engagement with key stakeholders following his appointment in July 2025.

Sunday reaffirmed NDIC’s strict adherence to fiscal and financial regulations, including the provisions of the Fiscal Responsibility Act (FRA) 2007, stressing that the corporation had consistently remitted the required proportion of its earnings to the Federal Government.

He noted that NDIC fully complies with statutory obligations, including the payment of 20 per cent of gross earnings or 80 per cent of net surplus, as applicable, while also submitting its financial statements ahead of statutory deadlines.

According to him, NDIC’s culture of compliance underscores its role as a critical institution within Nigeria’s financial safety net, tasked with protecting depositors and sustaining confidence in the banking system.

However, Sunday explained that compliance with the Federal Government’s 50 per cent cost-to-income ratio policy has placed operational constraints on the corporation.

He said the deductions significantly affect NDIC’s capacity to build a robust Deposit Insurance Fund required to reimburse depositors promptly in the event of bank failures.

He noted that international best practices, as outlined in the Core Principles for Effective Deposit Insurance issued by the International Association of Deposit Insurers (IADI), require deposit insurers to maintain sufficient funds to protect depositors without recourse to government intervention.