Insurers Get July 2026 Deadline To Comply With New Capital Requirement

By Sola Alabadan

The National Insurance Commission (NAICOM) has notified insurers and reinsurers that they have a period of 12 months, expiring on July 30, 2026, to comply with the new Minimum Capital Requirement (MCR), as well as the applicable Risk Based Capital (RBC) as stipulated in the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The NIIRA 2025 introduces higher Minimum Capital Requirements of N10 billion, N15 billion, N25 billion and N35 billion for life, non-life, composite and reinsurance companies respectively and a shift to a Risk-Based Capital (RBC) framework for insurance and reinsurance companies in Nigeria.
NAICOM stated that 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 Commission also promised to issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise in due course. The guidelines and circular shall include, but not limited to: the composition of the MCR; acceptable forms of capital; procedures for capital verification; qualifying assets for MCR purposes and criteria such as title, ownership, and existence; and a standardised template for computation of MCR.
For the avoidance of doubt, NAICOM informed the insurers and reinsurers that encumbered assets, assets without perfected title or ownership, and assets not in the full possession of an insurer/reinsurer shall be inadmissible for the purpose of meeting the MCR.
Similarly, assets that exceed prudential thresholds or do not meet the prescribed criteria shall also be deemed inadmissible.
As all assets for the purpose of the new MCR shall be subject to verification by the Commission or its appointed agents, NAICOM pointed out that, where, due to the nature or circumstances of an asset, the Commission deems it necessary to undertake further verification beyond the norm, the cost of such non-standard verification shall be borne by the concerned insurer or reinsurer.
Upon fulfilment of the new MCR, payment of the requisite fees and confirmation by the Commission, the successful insurance and reinsurance company shall be issued a new licence by the Commission.
The Commission equally promised to engage with relevant regulators such as SEC, CAC, NRS, etc and stakeholders, with a view to securing, where possible, appropriate incentives and concessions that may ease compliance and reduce the cost of the exercise.
NAICOM further assured the insurance industry and all stakeholders that the implementation of the new MCR, including the verification and confirmation processes, shall be conducted in a transparent, fair, and value-adding manner, stressing that the objective is to strengthen the financial soundness of the industry, enhance public confidence, and ensure that the benefits of the NIIRA 2025 accrue to the Nigerian people.
An in-house Committee has been established to oversee, coordinate, guide, monitor, and implement the recapitalisation exercise across the insurance industry.