Abuja: Determined to fortify Nigeria’s insurance sector, the National Insurance Commission (NAICOM) has issued a decisive ultimatum: insurers and reinsurers must meet the newly mandated capital thresholds within 12 months to comply with the new Minimum Capital Requirement (MCR) —or risk regulatory sanctions, including liquidation.
This directive, anchored in the Nigerian Insurance Industry Reform Act (NIIRA) 2025, raises the bar significantly, with capital requirements now reaching up to ₦35 billion for reinsurance firms. Thus, the countdown has begun.
The MCR was introduced by the Nigerian Insurance Industry Reform Act (NIIRA) , 2025.
The circular released in Abuja on Friday stated that any company failing to meet the prescribed MCR within the stipulated period would be subject to liquidation, merger, or any other regulatory resolution deemed appropriate by the Commission.
Dr Usman Jankara, the Deputy Commissioner, Technical of NAICOM signed the circular.
It can be recalled that NIIRA 2025, recently assented to by President Bola Tinubu, introduced a higher MCR of N10 billion, N15 billion, N25 billion, and N35 billion for life, non-life, composite, and reinsurance companies, respectively.
It also introduced a shift to a Risk-Based Capital (RBC) framework for insurance and reinsurance companies in the country.
The figures represented an increase from the existing requirements of three billion naira, two billion naira and N10 billion, respectively.
The Commission said that upon fulfilment of the new MCR, payment of the requisite fees and confirmation by the Commission, the successful insurance and reinsurance company would be issued a new licence.
It assured the insurance industry and all stakeholders that the implementation of the new MCR, including the verification and confirmation processes, would be conducted in a transparent, fair, and value-adding manner.
According to the Commission, the objective of the new MCR is to strengthen the financial soundness of the industry, enhance public confidence, and ensure that the benefits of NIIRA 2025 are accrued to citizens.
The Commission said it would engage relevant regulators such as the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC) and other stakeholders to secure, where possible, appropriate incentives and concessions to ease compliance and reduce the cost of the exercise.
” In line with the provisions of the Act, the new MCR takes effect from the date of Presidential assent, which is July 31, 2025; all operators are required to comply fully within twelve months from the effective date.
” The Commission shall, in due course, issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise.
” These shall include, but not be limited to, the composition of the MCR, acceptable forms of capital, procedures for capital verification, qualifying assets for MCR purposes and criteria such as title, ownership, and existence, a standardised template for computation of MCR,” NAICOM said.
The Commission informed insurers and reinsurers that encumbered assets, assets without perfected title or ownership, and assets not in the full possession of an insurer/reinsurer would be inadmissible to meet the MCR.
According to the Commission, assets that exceeded prudential thresholds or do not meet the prescribed criteria will also be deemed inadmissible.