NAICOM scrabbles for adequate risk-based capital as insurers recapitalise

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Chuks Udo Okonta

The National Insurance Commission (NAICOM) has embarked on a search for an adequate risk-based capital for insurance business operations, as the industry has scaled the first sets of recapitalisation hurdles with the enactments of Nigerian Insurance Industry Reform Act (NIIRA) 2025.

A risk-based capital would enable insurance companies underwrite insurance business factoring the risk elements.

The approach is expected to categories insurers – tier based – with each company operating based on their level of capital.

According to NAICOM, the 2025 Recapitalisation Committee has been constituted to recommend the composition of minimum capital requirements amongst others responsibilities.

The committee which is Chaired by Mrs. Oluwatoyin Charles, Director of Supervision, primary responsibility is to oversee the implementation of the recapitalisation program, which includes ensuring compliance with revised capital requirements and promoting transparency and integrity in sourcing and verifying capital inflows.

The Commissioner for Insurance, Olusegun Ayo Omosehin, emphasized the critical role of recapitalisation in stabilizing the industry and contributing to Nigeria’s $1 trillion economy vision during the Committee’s inauguration in Abuja today, August 12, 2025.

He urged the 11-member Committee to approach their task with professionalism, diligence, and commitment to the common interest, assuring them of necessary support.

*Some of the Key Terms of Reference for the Committee:*

– *Develop a Recapitalization Roadmap*: Create a detailed plan for the Commission and the insurance industry.
– *Guidelines and Circulars*: Develop guidelines and circulars on recapitalization.
– *Minimum Capital Requirements*: Recommend the composition of Minimum Capital Requirements.
– *Incentives and Concessions*: Identify incentives and concessions that may be obtained from other regulatory authorities.

The Committee is expected to submit monthly progress reports to Management and provide quarterly updates to the Governing Board and stakeholders.

NAICOM said it is confident that the Committee would successfully deliver on its mandate, shaping the future of Nigeria’s insurance sector.

It submitted that the Committee’s success is vital to the industry’s stability and growth, adding that it looks forward to collaborating with all stakeholders to achieve this objective.

The NIIRA 2025 introduces higher Minimum Capital Requirements (MCR) of N10 billion for life insurance, N15 billion for Non-life; N25 billion for composite and N35 reinsurance operations