The Federal Ministry of Finance has directed the National Insurance Commission (NAICOM) to suspend enforcement of disputed recapitalisation charges and related capital transfer requirements imposed on NICON Insurance Limited and Nigeria Reinsurance Corporation (Nig Re).
The directive followed a petition submitted by the two insurance companies over aspects of the ongoing insurance industry recapitalisation exercise being implemented under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
In a letter dated August 6, 2026, the Permanent Secretary of the Ministry of Finance, Raymond Omachi, writing on behalf of the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, asked NAICOM to respond to the complaints raised by the companies and provide the legal basis for the disputed regulatory requirements.
The ministry specifically directed the insurance regulator to suspend enforcement of the contested processing and verification charges, the one per cent capital injection fee and the requirement that the companies transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN).
The petition, dated July 27, 2026, challenged what NICON and Nig Re described as additional financial obligations arising from the recapitalisation process.
According to the companies, the disputed charges amounted to N305 million for NICON and N375 million for Nig Re, bringing the total amount under contention to N680 million.
The companies also questioned NAICOM’s directive requiring insurance operators to transfer their entire capital injection funds into an escrow account with the CBN. They argued that the requirement went beyond the statutory obligation contained in Section 16(3) of NIIRA 2025, which they said provides for a 10 per cent deposit.
The Finance Ministry said the petition contained what it described as notable grievances and consequently requested NAICOM to explain the legal and regulatory foundation for the charges and capital transfer directives.
The dispute comes as insurance companies work to meet the new minimum capital requirements introduced as part of the Federal Government’s efforts to strengthen the financial capacity and resilience of the insurance sector.
NICON and Nig Re told the ministry that they had already satisfied their adjusted recapitalisation requirements before the July 31, 2026 deadline.
According to the petition, NICON had injected N20 billion into a Mudaraba Term Deposit account with Lotus Bank Limited, while Nig Re had injected N30 billion.
The companies maintained that the amounts exceeded their respective adjusted capital requirements of N16 billion and N28 billion.
They further stated that NICON and Nig Re had deposited N2.5 billion and N3.5 billion respectively with the CBN in compliance with Section 16(3) of NIIRA 2025.
The petitioners also disclosed that they had made initial payments of N80 million and N75 million respectively in fees.
The central issue is therefore whether the two companies, having met their applicable recapitalisation requirements and made the statutory deposits, can be required to pay additional charges and transfer the full amounts of their injected capital into an escrow arrangement with the CBN.
In directing NAICOM to suspend enforcement, the Finance Ministry asked the commission to provide a detailed response to the issues raised by the companies and furnish the legal justification for its position.
The ministry’s intervention does not amount to a final resolution of the dispute. Rather, it places the contested requirements on hold while the petition is considered and NAICOM is given an opportunity to explain the statutory basis for its actions.
The matter could have wider implications for the insurance industry, particularly for operators affected by similar charges or capital transfer requirements under the ongoing recapitalisation exercise.
It also raises questions about the extent to which regulatory guidelines can impose additional financial obligations on regulated entities beyond the requirements expressly provided under the enabling legislation.
NAICOM is now expected to respond to the Finance Ministry’s request and clarify the legal basis for the one per cent capital injection fee, the additional processing and verification charges, as well as the directive requiring the transfer of the full capital injection into a CBN escrow account.
For NICON and Nig Re, the immediate effect of the intervention is the suspension of enforcement of the disputed requirements pending determination of their petition.
You must be logged in to post a comment.