How NIIRA 2025 will reshape Nigeria’s insurance industry capital base

The National Insurance Commission (NAICOM) has set a 12-month deadline for all insurers and reinsurers to meet new Minimum Capital Requirements (MCR) under the Nigeria Insurance Industry Reform Act (NIIRA) 2025.

This follows the assent of the Act by President Bola Tinubu and the commencement of the recapitalisation exercise on July 31, 2025.

Insurers are required to comply with the updated MCR and the associated Risk-Based Capital (RBC) framework by July 30, 2026.

The new capital thresholds specify that life insurance companies must have a minimum capital of N10 billion, non-life insurance companies N15 billion, composite insurance companies N25 billion, and reinsurance companies N35 billion.

NAICOM will soon provide detailed guidelines covering the composition of the MCR, acceptable capital forms, verification processes, qualifying assets, ownership criteria, and standardised computation templates.

Assets that are encumbered, lack clear ownership, or are not fully controlled by the insurers will not be accepted as part of the capital requirements.

Likewise, assets exceeding prudential limits or failing to meet regulatory standards will be rejected.

All assets submitted for compliance will be verified by NAICOM or its appointed agents, and insurers will bear any additional costs if verification requires non-standard procedures.

Operators who satisfy the new capital requirements, pay the necessary fees, and receive confirmation from NAICOM will be issued new operating licenses. Those failing to comply by the July 2026 deadline risk regulatory actions including liquidation or forced mergers.

To support a smooth recapitalisation process, NAICOM plans to work closely with other regulatory bodies such as the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), and Nigerian Stock Exchange (NSE) to explore possible incentives and concessions.

NAICOM has committed to ensuring that the recapitalisation process is transparent, equitable, and aimed at strengthening the financial stability of the insurance sector, thereby enhancing public confidence and ensuring that the benefits of NIIRA 2025 are fully realised by Nigerians.

An internal committee has been established to oversee the exercise, and all insurance companies are encouraged to prepare promptly, develop recapitalisation plans, and actively engage with the commission to meet the July 2026 deadline.