By Kingsley Benson
Nigeria’s insurance industry has entered a decisive phase in its recapitalisation programme as 20 insurance companies have submitted themselves for verification by the National Insurance Commission (NAICOM), signalling early compliance with regulatory reforms aimed at strengthening the financial health of the sector.
The verification process forms a key component of the ongoing recapitalisation exercise introduced under the Nigeria Insurance Industry Reform Act, 2025, which requires insurers to significantly increase their capital base or risk losing their operating licences.
The Commissioner for Insurance and chief executive officer (CEO) of NAICOM, Mr. Olusegun Omosehin, disclosed that the regulator has engaged global professional services firms to independently verify the recapitalisation status of the participating companies.
According to him, PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young have been appointed to support the verification process in order to ensure transparency and credibility.
Omosehin made the disclosure during a media interaction with journalists in Lagos, where he provided updates on the progress of the recapitalisation exercise and outlined the Commission’s broader reform agenda for Nigeria’s insurance sector.
He explained that the verification process is expected to be concluded before the end of the month.
Industry observers say the involvement of international consulting and auditing firms reflects the regulator’s determination to maintain credibility in the exercise and ensure that insurers’ capital claims are independently validated.
Omosehin said that the commission is determined to conduct the recapitalisation process in a transparent manner that protects policyholders and strengthens the long term stability of the insurance industry.
“Companies whose recapitalisation activities we have not seen may be invited for a meeting by the end of the month,” Omosehin said.
“The meeting will allow us to understand their plans and also make it clear what consequences they may face if they fail to meet the stipulated deadline,” he added.
The recapitalisation programme follows the signing of the Nigeria Insurance Industry Reform Act, 2025, which introduced sweeping regulatory changes designed to reposition the insurance sector to support economic growth.
Under the new law, insurance companies have until July 30, 2026 to comply with significantly higher capital thresholds.
The revised requirements represent a major increase across all categories of insurance operations.
For general insurance companies, the minimum capital requirement has been raised from N3 billion to N15 billion. Life insurance companies must increase their capital base from N2 billion to N10 billion, while composite insurers are required to raise their capital from N5 billion to N25 billion. Reinsurance companies face the highest adjustment, with minimum capital requirements rising from N10 billion to N35 billion.
Regulators believe the new capital benchmarks will improve the financial strength of insurers and enable them to underwrite larger risks in a growing economy.
Nigeria’s insurance industry has historically been criticised for weak capitalisation, which analysts say has limited its ability to support major infrastructure projects and industrial investments.
Omosehin emphasised that policyholder protection remains central to the reform process.
“The commission is not going to compromise the protection of policyholders, and nothing will be left undone to ensure that the exercise is credible,” he said.
Beyond recapitalisation, NAICOM is implementing a broader reform programme designed to strengthen governance, improve regulatory compliance and expand the role of insurance in Nigeria’s financial system.
Omosehin said that the reform agenda is anchored on the Nigeria Insurance Industry Reform Act, 2025, which provides the legal framework for restructuring the sector and aligning it with the broader economic vision of President Bola Ahmed Tinubu.
He explained that the commission is focused on disciplined implementation of reforms aimed at strengthening the financial soundness of insurance companies, improving governance standards and enhancing consumer protection.
As part of the implementation strategy, NAICOM has established a Nigeria Insurance Industry Reform Act Implementation Working Group to drive reforms across key areas including compulsory insurance enforcement, digital transformation and financial inclusion.
The commission is also strengthening collaboration with other financial regulators such as the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), National Pension Commission (PenCom) and the Central Bank of Nigeria (CBN).
According to Omosehin, closer cooperation among regulators will improve oversight across the financial system and strengthen governance standards.
NAICOM has also partnered with the Bureau of Public Procurement to integrate insurance bonds into government procurement processes.
The initiative is expected to expand opportunities for insurers through financial instruments such as bid bonds, performance bonds and advance payment guarantees used in public sector contracts.
Consumer protection is another key component of the reform programme.
Omosehin disclosed that the Commission has begun work on establishing an Insurance Policyholders Protection Fund, which will serve as a safety net to compensate policyholders if an insurance company fails.
In addition, NAICOM has introduced stricter Know Your Customer requirements requiring all insurance policies to be linked to the National Identification Number by the end of April 2026.
The policy is expected to improve transparency, reduce fraud and align the insurance sector with national anti-money laundering standards.
Omosehin noted that rebuilding public confidence in Nigeria’s insurance industry remains a priority.
He said NAICOM will continue to enforce reforms aimed at improving claims settlement, strengthening governance and ensuring that policyholders’ interests are protected.
Industry analysts believe the recapitalisation programme could mark a turning point for the sector if fully implemented.
With the compliance deadline approaching in July 2026, the submission of 20 insurers for verification signals that parts of the industry are beginning to align with NAICOM’s reform agenda as the sector prepares for a more demanding regulatory environment.
