NAICOM warns insurers ahead of July 31 recapitalisation deadline

NAICOM has issued a stern warning to insurance companies in Nigeria, emphasizing that the July 31 recapitalisation deadline is non-negotiable. The National Insurance Commission (NAICOM) urged all insurers who have not yet met the new minimum capital requirements to take immediate action. This directive comes amid ongoing efforts to strengthen the country's insurance sector through regulatory reforms and increased capitalization. The warning was delivered by Mr. Olusegun Ayo Omosehin, the Commissioner for Insurance and CEO of NAICOM, during the investiture ceremony of Mr. Akinjide Oluwarotimi-Orimolade as the 53rd President and Chairman of the Council of the Chartered Insurance Institute of Nigeria (CIIN) in Lagos. With just over two weeks remaining until the deadline, Omosehin highlighted that the recapitalisation initiative remains central to NAICOM’s broader reform strategy aimed at fostering a more robust and consumer-oriented insurance environment. According to Omosehin, the revised minimum capital requirements are designed to bolster insurers' ability to settle claims promptly, reinforce their financial stability, and ensure they can retain risks domestically. He acknowledged that some companies have already taken significant steps toward meeting these targets, including securing additional capital, engaging with investors, and undergoing internal reviews. However, he stressed that the deadline is binding and that all firms must approach it with the seriousness it warrants. NAICOM has pledged to uphold transparency and fairness throughout the verification process, ensuring that each insurer demonstrates financial health, adherence to regulations, and preparedness for operations. The Commissioner emphasized that stronger capitalization should lead to tangible benefits such as faster claim settlements, better customer protection, and higher trust in the insurance sector. These improvements, he argued, are essential for long-term sustainability and growth. The Nigerian Insurance Industry Reform Act (NIIRA) 2025 provides a solid legal foundation for these reforms, aiming to create a more stable, well-governed, and responsive insurance market. Under this legislation, NAICOM’s focus includes enhancing market behavior, protecting policyholders, improving corporate governance, increasing insurance coverage, expanding financial inclusion, and encouraging innovative practices. In his remarks, Omosehin underscored that the success of the insurance sector hinges not solely on capital and regulation but also on professionalism, ethics, innovation, and public trust. He stated that a trustworthy insurance market cannot be built on capital alone, but rather on the integrity of professionals, ethical institutions, reliable guidance, and equitable treatment of customers. The Commissioner also extended praise to the outgoing president of the Chartered Insurance Institute of Nigeria, Mrs. Yetunde Olubumi Ilori, for her leadership and contributions to the industry. He lauded her dedication to professional excellence and stakeholder collaboration, which he believed significantly benefited both the institute and the broader insurance community. Meanwhile, Lasaco Assurance, a composite insurance underwriter, has shown signs of recovery after posting a substantial half-year loss earlier in the year. The company reported a profit of N384.9 million for the period ending June, marking a turnaround from the N731.5 million loss recorded in the same period the previous year. This improvement was largely driven by cost-cutting measures rather than revenue growth. Lasaco managed to reduce insurance service expenses by 17 percent and lower net expenses related to reinsurance contracts by 11.4 percent, contributing to its improved financial position. Despite a slight drop in insurance revenue due to decreased returns from general business insurance contracts, the company maintained a strong performance overall. Investment results, however, declined by 13.4 percent, primarily due to a reduction in interest income from fixed deposits and bonds. Lasaco also faced challenges in the form of a net foreign exchange loss of N67.9 million, compared to a gain of N58.1 million in the same period the previous year. Additionally, other operating income dropped sharply, though the company remained profitable overall. Its recent rights issue, which raised N19.3 billion, has been verified by NAICOM and approved by the Securities and Exchange Commission. As the insurance industry nears the end of its recapitalisation phase, the pressure on firms to comply with the new capital thresholds continues to mount. Life insurers must increase their minimum paid-up capital from N2 billion to N10 billion, while non-life insurers face a similar rise from N3 billion to N15 billion. Composite insurers, meanwhile, must reach a minimum of N25 billion, up from N5 billion.