NAICOM Orders Insurers to Submit 2024 Capital Compliance Status Under New Minimum Capital Requirement Guidelines
The National Insurance Commission (NAICOM) has issued fresh guidelines directing insurance and reinsurance companies in Nigeria to submit their compliance status with the newly introduced Minimum Capital Requirement (MCR). According to the circular released on September 8, 2025, operators must provide details of their capital position based on their 2024 audited financial statements and second quarter returns as at June 30, 2025. The directive is part of efforts to ensure a smooth rollout of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
Signed by Oluwatoyin Charles, Director of the Supervision Directorate on behalf of Commissioner for Insurance, Olusegun Omosehin, the guidelines outline a standardized template for insurers to calculate their MCR. Under the NIIRA 2025, the MCR is defined as the excess of admissible assets over admissible liabilities, minus the insurer’s own shares. This move, NAICOM says, sets clear supervisory expectations to strengthen the financial health and transparency of Nigeria’s insurance sector.
The Commission has also set a series of deadlines for compliance. Insurers are required to submit recapitalisation plans by September 30, 2025 and thereafter provide monthly progress reports within 10 working days of each month’s end. Capital verification exercises will begin on November 1, 2025 and must be concluded by June 30, 2026. In addition, evidence of statutory deposits with the Central Bank of Nigeria (CBN) must be submitted by May 30, 2026, while the final compliance deadline is July 30, 2026—exactly 12 months after the NIIRA’s effective date.
Under the new framework, admissible assets include cash and bank balances, government and corporate bonds, treasury bills, quoted equities, loans to policyholders, reinsurance assets, premium receivables, and statutory deposits, among others. Admissible liabilities encompass insurance contract liabilities, reinsurance obligations, borrowings, tax liabilities, trade payables, and other accrued expenses. By clarifying these components, NAICOM aims to ensure consistency and transparency in how insurers report their capital positions.
To meet the MCR, insurers must also submit detailed action plans outlining how they intend to bridge any capital gaps, whether through fresh injections, mergers, acquisitions, portfolio transfers, or run-off plans. The thresholds under NIIRA 2025 are set at the higher of N10 billion or risk-based capital for life insurers, N15 billion or risk-based capital for non-life insurers, and N35 billion or risk-based capital for reinsurers. NAICOM expects that these steps will strengthen the solvency of the industry, protect policyholders, and enhance investor confidence in Nigeria’s insurance market.
source: business day