Finance Ministry orders review of NAICOM’s N680 million recapitalisation fees on two insurers

The Federal Ministry of Finance has directed the National Insurance Commission (NAICOM) to provide a legal justification for imposing a combined N680 million in recapitalisation-related charges on NICON Insurance Limited and Nigeria Reinsurance Corporation, while ordering the suspension of enforcement of the disputed fees pending the resolution of a petition filed by the two firms.

The directive was contained in a letter dated August 6, 2026, obtained by Nairametrics on Monday.

The letter was signed by the Permanent Secretary, Federal Ministry of Finance, Raymond Omachi, on behalf of the Minister of Finance and Coordinating Minister of the Economy.

The development marks the latest twist in the dispute over the implementation of the Nigerian Insurance Industry Reform Act (NIIRA), 2025, which introduced higher minimum capital requirements for insurance and reinsurance companies.

What the letter says

According to the letter, the ministry received a petition dated July 27, 2026 from NICON Insurance and Nigeria Re regarding the ongoing recapitalisation exercise under NIIRA 2025.

• The petition challenged NAICOM’s assessment of a 1% capital injection fee, alongside additional processing and verification charges imposed under Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines.
• The ministry stated that NAICOM assessed N305 million against NICON Insurance and N375 million against Nigeria Re, bringing the total disputed fees to N680 million.
• “The petitioners have raised notable grievances against the Commission regarding the assessment and demand for a 1% Capital Injection Fee alongside additional processing and verification fees pursuant to Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines, amounting to N305 million for NICON and N375 million for Nig Re,” the letter read.

The companies also challenged NAICOM’s directive requiring existing insurance operators to transfer their entire capital injection funds into an escrow account at the Central Bank of Nigeria (CBN).

According to the ministry, the firms argued that the directive was inconsistent with Section 16(3) of NIIRA 2025, which prescribes only a 10% statutory deposit with the CBN.

Firms insist they met recapitalisation requirement

The Finance Ministry said the companies maintained they had complied with the statutory July 31, 2026 recapitalisation deadline by injecting N20 billion into NICON Insurance and N30 billion into Nigeria Re through Mudaraba Term Deposit accounts with Lotus Bank Limited.

• The firms argued that the injections exceeded their adjusted capital requirements of N16 billion and N28 billion, respectively.
• They further informed the ministry that they had deposited N2.5 billion and N3.5 billion with the Central Bank of Nigeria pursuant to Section 16(3) of NIIRA 2025.

The letter also noted that NICON had already paid an initial N80 million, while Nigeria Re had paid N75 million towards the disputed charges.

NAICOM asked to suspend enforcement

The Finance Ministry requested NAICOM to submit a detailed response explaining the legal basis for the contested measures.

• “In view of the above, you are requested to provide a detailed response and legal justification regarding the issues raised,” the ministry said.

Pending the determination of the petition, the ministry instructed the insurance regulator to suspend enforcement of the disputed charges and directives against the two firms.

• “Pending the determination of the petition, the Commission should suspend the enforcement of the contested processing fees, 1% capital injection fee demands, and full-capital escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Corporation,” the letter stated.

What you should know

The ministry’s intervention comes after NAICOM announced that 43 insurance and reinsurance companies had successfully met the new minimum capital requirements introduced under the Nigerian Insurance Industry Reform Act 2025, while eight others remained under final verification. Neither NICON Insurance nor Nigeria Re appeared on either list.

• The dispute has since escalated, with the two companies challenging NAICOM’s interpretation of the recapitalisation guidelines, particularly the disputed fees and the requirement to transfer their entire capital injection into a CBN escrow account, despite the statutory provision requiring only a 10% deposit.
• Nairametrics also reported that NAICOM revoked the operating licence of Nigeria Reinsurance Corporation over its failure to meet the statutory minimum capital requirement under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.

The regulator also froze all bank accounts belonging to the company and appointed Dr. Muiz Banire (SAN) as Receiver and Provisional Liquidator to oversee the winding up of its affairs.