The National Insurance Commission (NAICOM) has officially commenced the implementation of the new Minimum Capital Requirements (MCR) for insurance and reinsurance companies across Nigeria, following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025. The Act, signed into law by President Bola Ahmed Tinubu on July 31, 2025, ushers in a transformative era for the sector, emphasizing financial robustness and public confidence.
According to Dr. Usman J. Jankara, Deputy Commissioner (Technical) at NAICOM, the reform introduces significantly higher capital thresholds: N10 billion for life insurers, N15 billion for non-life insurers, N25 billion for composite insurers, and N35 billion for reinsurers. The exercise also marks a shift to a Risk-Based Capital (RBC) framework, aligning Nigeria’s insurance sector with international best practices.
The recapitalisation process takes effect immediately from the date of Presidential assent, giving companies a 12-month window to meet the new requirements by July 30, 2026. NAICOM has assured operators that comprehensive guidelines detailing the modalities—covering capital composition, acceptable forms of assets, verification procedures, and standardised computation templates—will be issued shortly.
To ensure credibility, only assets with full, perfected ownership will qualify toward meeting the new capital thresholds. Encumbered or non-compliant assets will be deemed inadmissible, and any additional verification required by the Commission will be the responsibility of the insurer or reinsurer concerned. Upon successful compliance, companies will receive new licences, while defaulters risk liquidation, merger, or other regulatory actions.
NAICOM has also pledged engagement with regulators such as the SEC, CAC, and NRS to secure incentives that may ease compliance costs, while committing to transparency throughout the verification and recapitalisation exercise. An in-house committee has been established to oversee the process and ensure its smooth execution.
Industry observers describe the move as a landmark reform aimed at strengthening financial soundness, increasing public trust, and ensuring that Nigeria’s insurance sector contributes meaningfully to national economic growth. “This is a wake-up call for operators to realign their strategies, bolster their balance sheets, and embrace a more resilient, globally competitive insurance industry,” said an industry analyst who requested anonymity.
With just one year to comply, insurance and reinsurance companies are urged to commence internal preparations immediately, outline recapitalisation strategies, and proactively engage NAICOM to meet the new standards and secure the future of the Nigerian insurance industry.
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