By LOVETH-AZODO CHIJIOKE, Lagos
Persistent failure to submit audited financial statements, outstanding regulatory obligations and failure to meet key conditions for capital verification have emerged as some of the reasons certain insurance companies were excluded from the list of firms that successfully completed the recent recapitalisation exercise.
Among the companies affected are NICON Insurance Ltd, Nigeria Reinsurance Corporation, Universal Insurance Plc and African Alliance, which did not appear among the operators initially cleared by the National Insurance Commission (NAICOM) after the recapitalisation deadline.
The recapitalisation exercise, instituted under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, commenced in July 2025 and ended on July 31, 2026.
NAICOM subsequently issued new operating licences to 43 insurance and reinsurance companies it initially adjudged to have met the new minimum capital requirements.
The Commission later released the names of an additional seven insurance companies which had submitted their recapitalisation documents, together with evidence of payment of the required fees, before the July 31 deadline.
The documents of the seven companies were said to have been before appointed auditors for review before the deadline, prompting the Commission to allow an additional 14 days for verification.
The release of the seven companies subsequently brought the number of operators declared fit to operate under the new regime to 50.
However, some operators were not included in the final list.
Investigations from sources close to the regulator indicated that some of the companies left out had outstanding issues relating to compliance with regulatory requirements.
One of the key issues identified was the failure to submit audited financial statements over several years, including the absence of approved financial statements since 2019 and the failure to provide the required 2024 approved audited financial statement.
The development, according to the findings, made it difficult for the regulator or appointed auditors to establish the actual financial position of the affected company.
The company was also said to have consistently failed to submit monthly recapitalisation progress reports within the stipulated timelines, alongside other outstanding regulatory obligations.
Universal Insurance’s abandoned merger talks
The circumstances surrounding Universal Insurance were, however, said to be different.
According to the findings, the company had been engaged in serious merger discussions with another insurance firm before the recapitalisation deadline.
The company was said to have been confident that the proposed merger would be concluded and enable it to meet the new capital requirements.
However, the proposed merger reportedly collapsed at the last minute after the prospective merger partner secured a foreign investor who injected substantial capital into its business.
With the fresh investment, the other company was able to meet the recapitalisation requirement on a standalone basis and subsequently abandoned the merger discussions with Universal Insurance.
By the time this happened, according to the findings, Universal Insurance had little time left to make alternative arrangements to meet the July 31 deadline.
NICON’s ₦20bn capital claim
The case of NICON Insurance was also linked to its failure to satisfy conditions required before statutory capital verification could commence.
In July 2026, NICON claimed to have secured approximately ₦20 billion in capital injection.
However, the company was subsequently requested to provide updated minimum capital requirement computations, identify its investor, pay the required capital verification fee and provide evidence of the transfer of the recapitalisation proceeds into the designated escrow account.
According to the findings, instead of complying fully with the requirements, NICON maintained that compliance with the insurance statutory deposit obligation was sufficient to satisfy the capital requirement.
The position, however, differed from the recapitalisation guidelines issued by NAICOM in September 2025.
According to the guidelines, the statutory deposit requirement was separate from the recapitalisation escrow account, with both serving different regulatory purposes.
The guidelines also required recapitalisation proceeds to be transferred into the designated escrow account before verification.
Having failed to satisfy the stated requirements, the regulator concluded that NICON had not met the conditions necessary for statutory capital verification.
Consequently, no statutory capital verification was conducted on the company by any of the Big Four audit firms.
Nigeria Re’s ₦30bn claim
Nigeria Reinsurance Corporation faced a similar situation.
The corporation was said to have notified NAICOM in July 2026 of a ₦30 billion capital injection.
The Commission subsequently requested updated minimum capital requirement computations, evidence supporting the source of the capital, payment of the verification fee and evidence that the recapitalisation proceeds had been transferred into the designated Central Bank of Nigeria (CBN) escrow account.
Although some documents were reportedly submitted, the corporation allegedly failed to fulfil the mandatory requirement of transferring the claimed capital injection into the CBN recapitalisation escrow account to enable verification.
Consequently, the regulator concluded that the preconditions for statutory capital verification had not been met.
As a result, none of the Big Four audit firms conducted the statutory capital verification of Nigeria Re, leaving the Commission unable to admit the claimed capital injection for the purpose of the recapitalisation exercise.
NICON, Nigeria Re challenge NAICOM’s position
However, NICON and Nigeria Re have disputed aspects of the regulator’s position.
In an open letter to President Bola Tinubu published in some national newspapers, the owner of both companies, Jimoh Ibrahim, displayed cheques from Lotus Bank worth ₦30 billion and ₦20 billion, which he said represented payments for Nigeria Reinsurance Corporation and NICON Insurance respectively.
Ibrahim also accused NAICOM of unlawfully demanding ₦500 million, representing one per cent of shareholders’ funds, as well as the transfer of ₦50 billion and payment of ₦180 million in recapitalisation fees to the regulator.
The competing positions have therefore left the recapitalisation exercise with not only a clearer picture of the operators that met the new capital requirements, but also unresolved questions surrounding some of the companies that were excluded.
While NAICOM has proceeded with the licensing of companies it found compliant, the affected operators have continued to challenge aspects of the regulatory requirements and the treatment of their recapitalisation efforts.
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