BY NKECHI NAECHE-ESEZOBOR—The National Insurance Commission (NAICOM), on Friday unveiled the process and commencement of the new recapitalisation exercise as prescribed by the Nigerian Insurance Industry Reform Act (NIIRA) 2025, signed into law on July 30th by President Bola Ahmed Tinubu.
The Commission in a notice addressed to all the Chief Executive Officers of all Insurance and Reinsurance Companies in Nigeria, with reference number: NAICOM/CFI/DCT/NIIRA2025-RECAP/001, dated August 12, 2025, titled “Implementation Of The New Minimum Capital Requirement (MCR) Prescribed by the Nigerian Insurance Industry Reform Act (NIIRA) 2025,” and signed by the Deputy Commissioner (Technical), Dr Usman J. Jankara, implored all operators to commence internal preparations, outline a recapitalisation plan, engage proactively and take immediate steps to comply with the new minimum capital requirements within the stipulated 12-month period.
The commission also noted that the recapitalisation exercise takes effect from the date of the Presidential assent to the Act, July 31, 2025 while reassuring that the Commission is commitment to a successful implementation of the recapitalisation process.
NAICOM had on Tuesday this week constituted a 2025 Recapitalisation Committee, chaired by Mrs. Oluwatoyin Charles, Director of Supervision in the Commission.
The notice can be seen below:
Following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 and assent of His Excellency, President Bola Ahmed Tinubu, GCFR on the 31st of July 2025, the Commission hereby notifies all insurance and reinsurance companies of the commencement of the recapitalisation exercise as prescribed by the NIIRA 2025.
2.0 Minimum Capital Requirement and Risk-Based Capital The NIIRA 2025 introduces higher Minimum Capital Requirements (MCR) of N10billion, N15billion, N25billion and N35billion 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. In line with the provisions of the Act, the new MCR takes effect from the date of Presidential assent, and all operators are required to comply fully within a twelve (12) month period from the effective date.
3.0 Effective Date and Compliance Period
In line with the provisions of the Act, the new MCR takes effect from the date of Presidentialassent, that is 31st July, 2025. A 12-month period has been provided for insurers and reinsurers to comply with the new MCR as well as the applicable RBC as may be determined. All insurers and reinsurers shall comply with the requirements on or before the 30th day of July 2026.
4.0 Guidelines and Circulars
The Commission shall, in due course, issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise. These shall include, but not limited to:
i) The composition of the MCR;
ii) Acceptable forms of capital;
iii) Procedures for capital verification;
iv) Qualifying assets for MCR purposes and criteria such as title, ownership, and existence;
v) A standardised template for computation of MCR.
5.0 Treatment of Assets
For the avoidance of doubt, insurers and reinsurers are hereby informed that:
i) 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.
ii) Assets that exceed prudential thresholds or do not meet the prescribed criteria shall also be deemed inadmissible.
6.0 Verification of Assets
All assets for the purpose of the new MCR shall be subject to verification by the Commission or its appointed agents. In addition, 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.
7.0 Issuance of New Certificates and Fees
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 license by the Commission. Any company that fails to meet the prescribed MCR within the stipulated timeframe shall be subject to liquidation, merger, or any other regulatory resolution action as may be deemed appropriate by the Commission.
8.0 Engagement with Stakeholders
The Commission will 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.
9.0 Transparency and Value Addition
The Commission wishes to assure 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. 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.
10.0 In-House Committee
An in-house Committee has been established to oversee, coordinate, guide, monitor, and implement the recapitalisation exercise across the insurance industry.
11.0 Conclusion
All insurance and reinsurance companies are required to commence internal preparations,outline recapitalization plan, engage proactively and take immediate steps to comply with the new minimum capital requirements within the stipulated 12-month period.
The Commission is committed to ensuring a successful implementation of the recapitalisation exercise.
