The Federal Government has stepped into a growing dispute between the National Insurance Commission (NAICOM) and two state-owned insurance companies over controversial recapitalisation fees and the handling of fresh capital. The Federal Ministry of Finance has directed NAICOM to suspend enforcement of the disputed charges and a directive requiring NICON Insurance Limited and Nigeria Reinsurance Corporation to transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria.
The intervention followed a petition from NICON and Nigeria Re, which challenged what they described as excessive and unlawful charges under the Nigerian Insurance Industry Reform Act 2025. The companies disputed a one per cent capital injection fee, alongside processing and verification charges, amounting to N305 million for NICON and N375 million for Nigeria Re. They also questioned why they should be required to place all their fresh capital in a CBN escrow account when they believe the law requires only a 10 per cent statutory deposit.
According to the Finance Ministry, both companies say they have already exceeded their revised capital requirements. NICON injected N20 billion, against an adjusted requirement of N16 billion, while Nigeria Re injected N30 billion, above its N28 billion requirement. They also deposited N2.5 billion and N3.5 billion respectively with the CBN as statutory deposits and had made initial fee payments of N80 million and N75 million. The companies therefore maintain that they met the July 31, 2026 recapitalisation deadline.
In a letter dated August 6 and signed by the Permanent Secretary of the Ministry of Finance, Raymond Omachi, on behalf of Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, the ministry asked NAICOM to provide a detailed explanation and legal justification for the disputed charges and escrow directive. Until the petition is determined, the regulator has been directed to suspend enforcement of the one per cent capital injection fees, processing charges and full-capital escrow transfer requirements against the two companies.
The dispute comes at a critical moment for Nigeria’s insurance industry, as regulators push companies to build stronger capital bases and improve their ability to handle larger risks. While recapitalisation is aimed at creating a more resilient insurance sector capable of supporting economic growth, the disagreement with NICON and Nigeria Re highlights the need for clear and consistent rules. The industry will now be watching closely for NAICOM’s response and whether the regulator can provide the legal basis for the disputed fees and capital-transfer requirements.
source: punch
