The National Insurance Commission (NAICOM) has given insurers and reinsurance companies a 12-month period to comply with the new minimum capital requirement (MCR).

The MCR was introduced by the Nigerian Insurance Industry Reform Act (NIIRA), 2025.

In a circular released in Abuja on Friday, it was said that any company that failed to meet the prescribed MCR within the stipulated period would be liquidated, merged, or any other regulatory resolution deemed appropriate by the commission would be considered.

The circular was signed by Usman Jankara, the Deputy Commissioner, Technical of NAICOM.

NIIRA 2025, recently assented to by President Bola Tinubu, introduced a higher MCR of N10 billion, N15 billion, N25 billion and N35 billion for life, non-life, composite and reinsurance companies, respectively.

It also introduced a shift to a risk-based capital (RBC) framework for insurance and reinsurance companies in the country.

The figures represented an increase from the existing requirements of ₦3 billion, ₦2 billion and ₦10 billion, respectively.

The commission said that upon fulfilment of the new MCR, payment of the requisite fees and confirmation by the commission, the successful insurance and reinsurance company would be issued a new licence.

It assured the insurance industry and all stakeholders that the implementation of the new MCR, including the verification and confirmation processes, would be conducted in a transparent, fair, and value-adding manner.

According to the commission, the objective of the new MCR is to strengthen the financial soundness of the industry, enhance public confidence, and ensure that the benefits of NIIRA 2025 accrue to citizens.

The commission said it would engage relevant regulators such as the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC) and other stakeholders to secure, where possible, appropriate incentives and concessions to ease compliance and reduce the cost of the exercise.

NAICOM said, “In line with the provisions of the Act, the new MCR takes effect from the date of presidential assent, which is July 31, 2025. All operators are required to comply fully within a twelve-month period from the effective date. The commission shall, in due course, issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation.

“These shall include, but not be limited to, the composition of the MCR, acceptable forms of capital, procedures for capital verification, qualifying assets for MCR purposes and criteria such as title, ownership, and existence, and a standardised template for computation of MCR.’’

The commission informed insurers and reinsurers that encumbered assets, assets without perfected title or ownership, and assets not in the full possession of an insurer/reinsurer would be inadmissible for the purpose of meeting the MCR.

According to the commission, assets that exceeded prudential thresholds or do not meet the prescribed criteria will also be deemed inadmissible.

 (NAN)