Insurers Face Licence Revocation as NAICOM Recapitalisation Deadline Expires

Nigerian insurance companies that have failed to meet the new minimum capital requirements face the risk of losing their operating licences as the July 31, 2026 recapitalisation deadline set by the National Insurance Commission (NAICOM) expires today.

The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr. Olusegun Omosehin, has ruled out any further extension of the deadline, signalling that defaulting operators could face regulatory sanctions, including mergers, acquisitions, liquidation or other resolution measures under the law.

The recapitalisation exercise is being implemented under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which significantly raises the minimum capital thresholds across the sector.

Under the new regime, life insurance companies are required to maintain a minimum capital base of N10 billion, non-life insurers N15 billion, composite insurers N25 billion, while reinsurers must have at least N35 billion.

According to Omosehin, the recapitalisation is designed to strengthen the financial capacity of insurers, improve their ability to settle claims promptly, increase domestic risk retention and prepare the industry for the transition to a risk-based capital framework.

NAICOM has maintained that operators unable to meet the requirements risk losing their licences through regulatory actions, including liquidation, mergers or other intervention measures considered appropriate by the Commission.

However, the regulator has yet to disclose the number of insurance companies that have successfully met the new capital requirements, fuelling uncertainty across the industry as the deadline lapses.

The development has also intensified calls by operators for an extension of the exercise, with many insurers arguing that prevailing economic conditions have made capital raising increasingly difficult.

Industry stakeholders say insurers have struggled to access fresh funds from the capital market because the banking sector’s recapitalisation exercise had already absorbed much of the available investment capital.

Despite the challenges, eight insurance companies are understood to have approached the capital market to raise fresh capital, while several others are pursuing mergers, acquisitions and strategic partnerships to avoid regulatory sanctions.

Industry estimates indicate that insurers require more than N1 trillion in additional capital to comply fully with the new regulatory thresholds.

The recapitalisation drive comes at a time of elevated interest rates, foreign exchange volatility and tight liquidity, conditions that have weakened investor appetite and complicated fundraising efforts.

Several insurance firms are also exploring strategic alliances with foreign investors to strengthen their capital base and improve their chances of meeting the new requirements.

Industry sources told Daily Sun that merger and acquisition discussions remain active across the sector as operators race to preserve their licences.

Commending firms that have made progress in meeting the requirements, Omosehin said companies had demonstrated commitment by raising fresh capital, engaging investors, strengthening corporate governance and submitting their recapitalisation plans for regulatory verification.

“We commend operators that have made significant progress in raising capital, engaging investors, strengthening governance and submitting for the Commission’s verification process.

“However, the deadline is not symbolic; it is regulatory and the industry must treat it with the urgency it deserves,” he said.

The NAICOM boss assured stakeholders that the recapitalisation exercise would be conducted transparently, fairly and firmly, stressing that every operator must demonstrate financial soundness, regulatory compliance and operational readiness to support the long-term growth and stability of Nigeria’s insurance industry.