Kari Opposes Regulatory Concessions For Insurance Recapitalization Defaulters

By LOVETH-AZODO CHIJIOKE, Lagos

Former Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Alhaji Mohammed Kari, has urged the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, to reject calls for regulatory concessions for companies that failed to meet the requirements of the recently concluded insurance industry recapitalisation exercise.

Kari, who is also a former Managing Director/Chief Executive Officer of NICON Insurance and Nigeria Reinsurance Corporation, said granting concessions to chronic regulatory defaulters could undermine discipline and create an uneven playing field in the insurance industry.

He made the call in an open letter to the Minister of Finance, arguing that government intervention in the financial sector should be reserved for institutions whose failure poses a genuine systemic risk to the economy.

His position comes amid a legal dispute involving NICON Insurance and Nigeria Re over regulatory demands arising from the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.

As part of the recapitalisation exercise, NAICOM had directed insurance companies to transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN).

NICON Insurance and Nigeria Re are challenging the directive in court. In a July 27, 2026 petition, the companies also complained to NAICOM over what they described as unlawful fees and regulatory demands arising from the implementation of NIIRA 2025.

Through their lawyers, the companies subsequently wrote the Ministry of Finance, asking it to direct NAICOM to suspend the demand for the transfer of their recapitalisation funds into the CBN escrow account pending the determination of their petition challenging the legality of the charges and directive.

However, Kari argued that the circumstances of the two companies do not justify government intervention.

According to him, while government intervention may be justified in exceptional circumstances to protect institutions considered “too big to fail”, such intervention should only apply where the failure of an institution could trigger wider economic consequences.

Kari said NICON Insurance and Nigeria Re no longer have the market dominance they once enjoyed, following years of decline, loss of market share and operational contraction.

He said their current market position does not constitute a systemic threat to Nigeria’s financial system or broader economy.

“Why then should government intervene to shield operators whose distress carries no systemic consequence whatsoever?” he queried.

Kari warned that granting regulatory concessions to companies that fail to meet the same requirements as compliant operators could distort competition in the market.

According to him, companies that comply with regulatory requirements bear the full cost of doing so, while those that obtain exemptions could gain an artificial cost advantage.

He also argued that allowing political intervention to become an alternative to recapitalisation could discourage companies from taking difficult decisions required to strengthen their balance sheets and operations.

Kari further warned that regulatory concessions could affect investor confidence, arguing that both domestic and international investors require a predictable and transparent regulatory environment.

He also linked regulatory discipline to policyholder protection, stressing that capital and other regulatory requirements are designed to ensure that insurers remain capable of meeting their obligations and paying claims when losses occur.

“Regulatory standards exist primarily to guarantee that when disaster strikes, claims are paid promptly,” he stated, warning that shielding insolvent entities could expose policyholders to greater risk.

The former NAICOM commissioner said Nigeria’s insurance sector has significant potential but would require a level playing field to achieve sustainable growth.

He therefore urged the Federal Government to allow NAICOM to apply regulatory requirements uniformly across the industry, regardless of the ownership history or status of an operator.

“The Federal Government must resist the urge to grant special carve-outs or act as an informal court of appeal for failing operators,” Kari said.

He added that NAICOM, as the regulator empowered by the government, should be allowed to enforce the law equally across the industry.

Kari expressed confidence that maintaining regulatory discipline and refusing to shield non-compliant operators would strengthen investor confidence and demonstrate Nigeria’s commitment to financial discipline.