NIIRA 2025: NAICOM’s Confirmation of 43 Insurers Wasn’t a Fresh Licence but Approval to Continue Operations

The implementation of the Nigeria Insurance Industry Reform Act (NIIRA) 2025 ushered in a new era for Nigeria’s insurance industry, introducing higher capital requirements, a strengthened licensing framework and more rigorous regulatory oversight. However, contrary to some interpretations, the law did not automatically wipe out or invalidate the operating licences previously held by insurance companies.
Rather than cancelling all existing licences, NIIRA 2025 required every licensed insurer and reinsurer to demonstrate compliance with new statutory minimum capital requirements within a prescribed transition period. The National Insurance Commission (NAICOM), as the industry’s regulator, was empowered to verify each company’s compliance before determining whether it could continue operating under the new legal terms.

An insurer, speaking on condition of anonymity, said that this distinction is significant. The recapitalisation exercise was not designed to erase the legal existence of insurers or invalidate their previous operations. Instead, it was a comprehensive regulatory assessment intended to ensure that only financially sound companies remained in the market, he stressed.
“Consequently, the insurance policies issued, claims paid, contracts executed and other business activities undertaken by insurers before the completion of the recapitalisation exercise remain legally valid because they were carried out under licences that were valid at the time. NIIRA 2025 does not operate retrospectively to invalidate lawful business already conducted.
He continue, following the verification process, NAICOM confirmed 43 insurers and reinsurers as having met the new capital requirements prescribed by NIIRA 2025. For these companies, the outcome represented regulatory continuity rather than a completely new beginning.
“Although NAICOM announced the issuance or confirmation of licences under the new regime, this should not be interpreted to mean that the companies’ previous operating history was erased or that their former licences became legally meaningless overnight. Instead, their authority to continue operating was preserved because they successfully satisfied the new statutory requirements.
“In practical terms, their previous licences survived the recapitalisation process by passing the new legal and financial test established under NIIRA 2025. The regulatory exercise effectively transformed existing licences into licences recognised under the new framework, ensuring uninterrupted business operations for compliant insurers.
He stressed, for companies that failed to meet the new capital thresholds, the position was different. NIIRA 2025 empowered NAICOM to take appropriate regulatory action, including licence cancellation, mergers, acquisitions, portfolio transfers, run-off arrangements or other statutory resolution measures. However, even in such cases, lawful operations undertaken before any regulatory action were not automatically rendered invalid.
“The reform therefore focused on future regulatory compliance rather than retrospective invalidation of past activities.
“The Act also preserved one of the cardinal principles of insurance regulation in Nigeria: no person or company may conduct insurance or reinsurance business without a valid operating licence issued by NAICOM. What changed under NIIRA 2025 was the introduction of stricter licensing categories, stronger capital standards, enhanced corporate governance requirements and more robust supervisory powers for the Commission, he stated.
Was Recapitalisation the Yardstick for the New Licences?
The recapitalisation exercise became the principal benchmark for determining whether existing insurers could continue operating under NIIRA 2025. It was not, by itself, the legal basis for issuing a licence, but it became the decisive compliance requirement during the industry’s transition to the new regulatory regime.
For a new insurance company seeking entry into the market, NAICOM still assesses a wide range of statutory requirements, including the prescribed minimum paid-up share capital, ownership structure, corporate governance, business plan, operational readiness, the fitness and propriety of directors and senior management, and compliance with all provisions of NIIRA 2025 and other applicable regulations.
For insurers already in operation before the reform, however, the recapitalisation exercise became the defining test. Those that successfully met the new capital thresholds retained their legal authority to operate, while those that failed became subject to NAICOM’s enforcement and resolution powers.
Therefore, NAICOM’s confirmation of 43 insurers should not be viewed merely as the issuance of fresh licences. Rather, it was a regulatory endorsement that these companies had successfully met the conditions required to continue operating under Nigeria’s reformed insurance law.
The exercise underscores the broader objective of NIIRA 2025—to build a stronger, better-capitalised and more resilient insurance industry capable of protecting policyholders, enhancing public confidence and supporting long-term economic growth. Instead of invalidating the industry’s past, the reform established a more robust legal foundation for its future.
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NIIRA 2025 did not automatically invalidate existing insurance licences. Instead, NAICOM subjected insurers to a recapitalisation and compliance test, confirming 43 companies to continue operations under Nigeria’s new insurance regulatory regime.