By Benson Daniel
NICON Insurance Limited and Nigeria Reinsurance Corporation are facing an uphill battle in their dispute with the National Insurance Commission over the implementation of Nigeria’s insurance industry recapitalisation requirements, according to a source within the regulator.
The two companies, linked to businessman and politician Jimoh Ibrahim, have challenged aspects of the recapitalisation exercise in court after they were excluded from the list of 43 insurance and reinsurance companies that NAICOM confirmed had met the new minimum capital requirements.
The dispute intensified after NAICOM took regulatory action against the companies, including the cancellation of Nigeria Re’s operating licence. The commission also appointed a receiver and provisional liquidator to oversee the affairs of Nigeria Re.
A source at NAICOM, speaking on condition of anonymity because the matter is before the court, said the companies’ challenge was unlikely to succeed, arguing that other operators had complied with the regulator’s requirements.
The controversy stems from the insurance industry’s recently concluded recapitalisation exercise under the Nigerian Insurance Industry Reform Act 2025. The new framework raised minimum capital requirements to N15 billion for non life insurers, N10 billion for life insurers, N25 billion for composite insurers and N35 billion for reinsurers.
NICON and Nigeria Re have maintained that they complied with the July 31, 2026 deadline by injecting N20 billion into NICON Insurance and N30 billion into Nigeria Re through Mudaraba Term Deposit accounts with Lotus Bank.
The companies said the amounts exceeded their adjusted capital requirements of N16 billion for NICON and N28 billion for Nigeria Re. They also stated that they deposited N2.5 billion and N3.5 billion respectively with the Central Bank of Nigeria in accordance with the statutory requirements under the new law.
However, NAICOM disputes the interpretation of the companies’ compliance claims. The commission maintains that raising the required capital was only part of the conditions for full compliance with the recapitalisation framework.
One of the major points of disagreement is NAICOM’s requirement for a one per cent capital injection fee, alongside processing and verification charges contained in its Minimum Capital Requirement Guidelines.
The companies have also challenged the regulator’s directive requiring operators to transfer their capital injection funds into an escrow account with the CBN. NICON and Nigeria Re argue that the directive conflicts with the provision of the Nigerian Insurance Industry Reform Act requiring a 10 per cent statutory deposit with the central bank.
The dispute had earlier emerged during legislative consideration of the insurance reform framework. Jimoh Ibrahim opposed the proposed increase in the minimum capital requirement for reinsurance companies, arguing that a higher threshold could force some operators out of the Nigerian market and increase dependence on foreign reinsurers.
His proposal to retain the previous N20 billion minimum requirement was not seconded during the Senate proceedings, allowing the higher threshold to proceed.
NAICOM has since concluded the 12 month recapitalisation exercise and confirmed 43 insurance and reinsurance companies as compliant with the new requirements.
The dispute involving NICON and Nigeria Re could therefore have wider implications for Nigeria’s insurance industry, particularly regarding regulatory compliance, capital adequacy and the future of indigenous insurance and reinsurance businesses.
As the legal challenge continues, the outcome could determine how the new recapitalisation framework is interpreted and enforced across the sector.
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