Insurance Firms Rush to Meet Sept 30 Recapitalisation Deadline Amid New NIIRA 2025 Guidelines
Insurance companies across Nigeria are racing against the September 30 deadline to submit their recapitalisation plans to the National Insurance Commission (NAICOM), following the enactment of the Nigeria Insurance Industry Reform Act (NIIRA) 2025. The regulator outlined this requirement in its exposure draft of guidelines on minimum capital requirements for insurance and reinsurance firms, signaling a major step in the sector’s reform.
The guidelines mandate that each company’s recapitalisation plan must include a board resolution, detailed capital status based on 2024 audited financial statements and mid-year 2025 returns, and a clear roadmap for capital injections. Companies planning to raise funds via the capital markets or pursue mergers and acquisitions must also submit detailed proposals, while firms discontinuing certain insurance lines must include a portfolio transfer and run-off plan.
To ensure ongoing compliance, insurers and reinsurers are required to submit a Recapitalisation Progress Report monthly, detailing achieved milestones, minimum capital requirement (MCR) status, and efforts toward meeting their recapitalisation plans. Firms that meet the required MCR will continue submitting updated reports until a licence is issued or NAICOM specifies otherwise.
Capital verification for compliant companies is set to begin on November 1, 2025, and conclude by June 30, 2026. By this time, all directives arising from the verification exercise are expected to be fulfilled. Additionally, insurers must submit evidence of payment of statutory deposits to the Central Bank of Nigeria by May 30, 2026, with full recapitalisation compliance due in July 2026.
Under NIIRA 2025, the composition of MCR for existing insurers is calculated as the excess of admissible assets over liabilities, minus any own shares held. Admissible assets include cash, bank balances, government bonds, corporate bonds, treasury bills, reinsurance assets, policyholder loans, investment properties (capped at 20% of MCR), and statutory deposits, ensuring a robust capital base for the industry.
Source: Punch