The National Insurance Commission (NAICOM) has adopted the new Minimum Capital Requirements (MCR) and a Risk-Based Capital (RBC) framework as prescribed by the Nigerian Insurance Industry Reform Act (NIIRA) 2025 recently assented by President Bola Tinubu, for insurance and reinsurance companies in Nigeria.
Further, in a circular to all insurance and reinsurance companies, NAICOM gave on or before the 30th day of July 2026, as deadline for compliance by operators or face necessary actions that may be resorted to by the apex regulator.
“Any company that fails to meet the prescribed MCR within the stipulated timeframe shall be subject to liquidation, merger, or any other regulatory resolution action as
may be deemed appropriate by the Commission”, NAICOM stressed in the circular endorsed by Dr Usman J. Jankara, Deputy Commissioner (Technical)
OPTIMUM TIMES recalls NAICOM had in the past made attempts at recapitalising the insurance sector based on Risk-Based Capital (RBC) framework but it was stoutly opposed by operators.
But the NIIRA 2025 “introduces higher Minimum Capital Requirements (MCR) of N10billion, N15billion, N25billion and N35billion for life, non-life, composite and reinsurance companies respectively and a shift to a Risk-Based Capital (RBC) framework for insurance and reinsurance companies in Nigeria”, NAICOM noted.
Further NAICOM stated: “In line with the provisions of the Act, the new MCR takes effect from the date of Presidential assent, and all operators are required to comply fully within a twelve (12) month period from the effective date.
“The new MCR takes effect from the date of Presidential assent, that is 31st July, 2025. A 12-month period has been provided for insurers and reinsurers to comply with the new MCR as well as the applicable RBC as may be determined. All insurers
and reinsurers shall comply with the requirements on or before the 30th day of July 2026.”
However, the Commission explained that it would in due course issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise.
According to the Commission, further guidelines would include among other things, specify 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; and a standardised template for computation of MCR.
The full text of the circular reads below:
REF: NAICOM/CFI/DCT/NIIRA2025-RECAP/001
DATE: 12TH AUGUST 2025
TO: ALL INSURANCE AND REINSURANCE COMPANIES IN NIGERIA
SUBJECT: IMPLEMENTATION OF THE NEW MINIMUM CAPITAL REQUIREMENT (MCR)
PRESCRIBED BY THE NIGERIAN INSURANCE INDUSTRY REFORM ACT (NIIRA) 2025
Following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 and assent of
His Excellency, President Bola Ahmed Tinubu, GCFR on the 31st of July 2025, the Commission hereby
notifies all insurance and reinsurance companies of the commencement of the recapitalisation exercise as prescribed by the NIIRA 2025.
2.0 Minimum Capital Requirement and Risk-Based Capital
The NIIRA 2025 introduces higher Minimum Capital Requirements (MCR) of N10billion, N15billion, N25billion and N35billion for life, non-life, composite and reinsurance companies respectively and a shift to a Risk-Based Capital (RBC) framework for insurance and reinsurance companies in Nigeria.
In line with the provisions of the Act, the new MCR takes effect from the
date of Presidential assent, and all operators are required to comply fully within a twelve (12) month period from the effective date.
3.0 Effective Date and Compliance Period
In line with the provisions of the Act, the new MCR takes effect from the date of Presidential assent, that is 31st July, 2025. A 12-month period has been provided for insurers and reinsurers to comply with the new MCR as well as the applicable RBC as may be determined. All insurers
and reinsurers shall comply with the requirements on or before the 30th day of July 2026.
4.0 Guidelines and Circulars
The Commission shall, in due course, issue comprehensive guidelines and circulars detailing the modalities for the recapitalisation exercise. These shall include, but not limited to:
i) The composition of the MCR;
ii) Acceptable forms of capital;
iii) Procedures for capital verification;
iv) Qualifying assets for MCR purposes and criteria such as title, ownership, and existence;
v) A standardised template for computation of MCR.
5.0 Treatment of Assets
For the avoidance of doubt, insurers and reinsurers are hereby informed that:
i) Encumbered assets, assetswithout perfected title or ownership, and assets not in the full
possessionof an insurer/reinsurer shall be inadmissible for the purpose of meeting the MCR.
ii) Assets that exceed prudential thresholds or do not meet the prescribed criteria shall also
be deemed inadmissible
Verification of Assets
All assets for the purpose of the new MCR shall be subject to verification by the Commission or its appointed agents. In addition, where, due to the nature or circumstances of an asset, the Commission deems it necessary to undertake further verification beyond the norm, the cost of such non-standard verification shall be borne by the concerned insurer or reinsurer.
7.0 Issuance of New Certificates and Fees
Upon fulfilment of the new MCR, payment of the requisite fees and confirmation by the Commission, the successful insurance and reinsurance company shall be issued a new licence by the Commission. Any company that fails to meet the prescribed MCR within the stipulated timeframe shall be subject to liquidation, merger, or any other regulatory resolution action as
may be deemed appropriate by the Commission.
8.0 Engagement with Stakeholders
The Commission will engage with relevant regulators such as SEC, CAC, NRS, etc and stakeholders with a view to securing, where possible, appropriate incentives and concessions that may ease compliance and reduce the cost of the exercise.
9.0 Transparency and Value Addition
The Commission wishes to assure the insurance industry and all stakeholders that the
implementation of the new MCR, including the verification and confirmation processes, shall
be conducted in a transparent, fair, and value-adding manner. The objective is to strengthen the
financial soundness of the industry, enhance public confidence, and ensure that the benefits of the NIIRA 2025 accrue to the Nigerian people.
10.0 In-House Committee
An in-house Committee has been established to oversee, coordinate, guide, monitor, and
implement the recapitalisation exercise across the insurance industry.
11.0 Conclusion
All insurance and reinsurance companies are required to commence internal preparations,
outline recapitalization plan, engage proactively and take immediate steps to comply with the new minimum capital requirements within the stipulated 12-month period.
The Commission is committed to ensuring a successful implementation of the recapitalisation exercise.
For enquiries and further clarification, please contact: recapitalisation@naicom.gov.ng.
Please accept the assurances of the Commission’s best wishes.
Dr Usman J. Jankara
Deputy Commissioner (Technical)
