NICON, Nigeria Re fighting a lost battle against NAICOM, source says

NICON Insurance Limited and Nigeria Reinsurance Corporation are fighting a “lost battle” in their dispute with the National Insurance Commission (NAICOM) over the recently concluded insurance sector recapitalisation exercise, a source at the regulator has said.

The two companies, linked to businessman and politician Jimoh Ibrahim, have challenged the recapitalisation process in court after they were excluded from NAICOM’s list of 43 insurance and reinsurance companies that met the new minimum capital requirements.

The companies have subsequently been placed under regulatory action following the cancellation of their operating licences.

What they are saying

A NAICOM source, who spoke to Nairametrics on condition of anonymity because the matter is before the court, said the companies’ position was unlikely to succeed.

The source recalled that Senator Jimoh Ibrahim had opposed the proposed increase in the minimum capital requirement for reinsurance companies during the Senate consideration of the Nigerian Insurance Industry Reform Bill in December 2024.

• “He even threatened court action then. But upon moving the motion for the Senate not to proceed with it, he failed to get a seconder to the motion. He is fighting a long-lost battle, be assured,” the source said.

The source described the situation as one involving operators of a regulated business who were unwilling to comply with the regulator’s requirements.

• “All insurance firms have complied but Jimoh Ibrahim’s NICON and Nigeria-Re did not comply and their licences have been cancelled,” the source said.

Get up to speed

Nairametrics reviewed a video of the Senate plenary session of December 2024 in which Ibrahim argued against raising the minimum capital requirement for reinsurance companies to N35 billion.

He warned that the higher requirement could force some reinsurance companies out of Nigeria and increase the country’s dependence on foreign reinsurers.

• “N35 billion capital base, that’s completely out of order,” Ibrahim said during the debate.

He argued that the proposed increase from N20 billion to N45 billion, as contained in the initial proposal before the Senate, was excessive and could weaken indigenous reinsurance capacity.

Ibrahim subsequently proposed retaining the existing N20 billion minimum capital requirement.

However, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru, defended the proposed increase.

Abiru said the capital requirement was part of a broader risk-based framework and noted that the initial proposal of N45 billion had already been reduced to N35 billion following discussions and public hearings.

According to him, the N35 billion threshold represented a consensus reached during the legislative process.

Ibrahim’s proposal to retain the N20 billion threshold was not seconded and was consequently ruled out.

NICON, Nigeria Re challenge recapitalisation requirements

The dispute escalated after NICON and Nigeria Re petitioned the Federal Government over aspects of NAICOM’s implementation of the recapitalisation exercise under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.

• Among the issues raised was NAICOM’s requirement for a 1% capital injection fee, alongside processing and verification charges contained in the Commission’s Minimum Capital Requirement Guidelines.
• The companies also challenged NAICOM’s directive requiring operators to transfer their capital injection funds into an escrow account with the Central Bank of Nigeria (CBN).
• They argued that the directive was inconsistent with Section 16(3) of NIIRA 2025, which provides for a 10% statutory deposit with the CBN.

NICON and Nigeria Re maintained that they had complied with the 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.

According to the companies, the capital injections exceeded their adjusted requirements of N16 billion and N28 billion respectively.

They also said they had deposited N2.5 billion and N3.5 billion with the CBN in accordance with Section 16(3) of NIIRA 2025.

NAICOM disputes compliance claims

NAICOM has challenged the companies’ interpretation of the requirements, arguing that the capital injections alone did not constitute full compliance with the recapitalisation framework.

• “If he had raised the money, why is he afraid of transferring the money to the Escrow Account with the CBN? All other companies did,” the NAICOM source told Nairametrics.

The source added that the companies had complied with only two of the five statutory requirements prescribed under NIIRA 2025 and the Commission’s Minimum Capital Requirement Guidelines.

What you should know

NAICOM recently completed the 12-month insurance industry recapitalisation exercise, confirming 43 insurance and reinsurance companies as compliant with the new minimum capital requirements.

• Under the new framework, non-life insurers are required to maintain a minimum capital of N15 billion, life insurers N10 billion, composite insurers N25 billion and reinsurers N35 billion.
• Nigeria Re subsequently became the first insurance operator to lose its licence following the conclusion of the recapitalisation exercise.
• NAICOM revoked the company’s operating licence over its failure to meet the statutory minimum capital requirement and froze its bank accounts.

The Commission also appointed Dr Muiz Banire (SAN) as Receiver and Provisional Liquidator to oversee the winding up of Nigeria Re’s affairs.