Finance Ministry Halts NAICOM’s Recapitalisation Fee Enforcement Amidst NICON and Nigeria Re Dispute
The Federal Ministry of Finance has intervened in the ongoing insurance industry recapitalisation exercise, directing the National Insurance Commission (NAICOM) to suspend the enforcement of disputed recapitalisation fees and a directive mandating NICON Insurance Limited and Nigeria Reinsurance Corporation to transfer their entire fresh capital into a Central Bank of Nigeria (CBN) escrow account. This move follows a petition by the two state-owned insurers challenging NAICOM’s assessment of significant fees and its interpretation of capital transfer requirements under the Nigerian Insurance Industry Reform Act (NIIRA), 2025.
The directive, conveyed in a letter dated August 6, 2026, and signed by Permanent Secretary Raymond Omachi on behalf of the Minister of Finance, Mr Taiwo Oyedele, also demands a detailed legal justification from NAICOM for its assessments. Specifically, NAICOM had levied N305 million against NICON and N375 million against Nigeria Re as part of the recapitalisation process. The insurers contested NAICOM’s demand for a one per cent capital injection fee, alongside processing and verification charges, arguing that Section 16(3) of NIIRA 2025 only mandates a statutory deposit of 10 per cent of their capital.
According to the Finance Ministry’s correspondence, NICON and Nigeria Re had already injected N20 billion and N30 billion respectively into Mudaraba Term Deposit accounts with Lotus Bank, exceeding their adjusted capital requirements of N16 billion and N28 billion. Furthermore, they had deposited N2.5 billion and N3.5 billion with the CBN as statutory deposits and paid initial fees of N80 million and N75 million, respectively, leading them to believe they had met the July 31, 2026, recapitalisation deadline.
The ministry’s letter explicitly states that pending the resolution of the petition, NAICOM must suspend the enforcement of contested processing fees, the one per cent capital injection fee demands, and the full-capital escrow transfer directives against NICON and Nigeria Re. This intervention underscores the Federal Government’s commitment to strengthening the insurance sector’s capital base and its capacity to underwrite larger risks. However, the dispute raises critical questions regarding the scope of NAICOM’s regulatory authority in imposing additional fees and mandating the placement of entire recapitalisation funds in escrow. The ministry’s letter did not indicate whether NAICOM had yet responded to these queries.
