By LOVETH-AZODO CHIJIOKE, Lagos
The National Insurance Commission (NAICOM) made efforts to encourage insurance operators to explore mergers and other strategic combinations as an alternative to failing to meet the new recapitalisation requirements, but no major proposal was brought before the commission within the stipulated period, the Commissioner for Insurance, Olusegun Omosehin, has said.
Omosehin disclosed this at a media interactive session in Lagos while explaining the commission’s approach to operators that were unable to independently meet the new minimum capital requirements.
According to him, NAICOM had repeatedly encouraged affected operators to consider mergers, partnerships and other forms of restructuring, stressing that the objective of the recapitalisation exercise was to build stronger and more financially resilient insurance companies, rather than eliminate operators from the market.
He said he personally encouraged operators to explore combinations where necessary, including bringing parties together for discussions, because the commission did not want companies to lose their licences when there were possible avenues for preserving viable businesses.
The commissioner, however, stressed that while the regulator could encourage and facilitate an enabling environment for such arrangements, it could not compel companies to merge.
He said operators ultimately had to make their own commercial decisions and ensure that any restructuring arrangement was concluded within the regulatory timeline.
Omosehin said the essence of the exercise was to ensure that insurance companies had sufficient financial capacity to underwrite risks and protect policyholders, rather than allowing inadequately capitalised operators to continue in the market.
“The capital exercise was never intended to eliminate any operator from the market. That wasn’t the intention,” he said.
He added: “Having a 5% of a thriving business is better than 0% of a cancelled licence. 100% of a cancelled licence makes no sense because you no longer get anything.”
Universal’s Reported Merger Talks
The commissioner’s comments come against the backdrop of reports surrounding Universal Insurance Plc, which had reportedly explored a possible merger with Great Nigeria Insurance (GNI) as the recapitalisation deadline approached.
Reports had indicated that discussions were held between the two companies over a possible combination, although the proposed arrangement did not ultimately materialise.
The development subsequently left Universal among the operators whose licences were revoked after they failed to meet the applicable recapitalisation requirements by the July 31, 2026 deadline.
Omosehin maintained that the regulatory deadline could not be extended indefinitely for operators that had not met the requirements within the prescribed period.
He said operators had been given a 12-month window to comply, adding that the commission had to take stock of those that had met the requirements at the expiration of the deadline.
“As of the deadline, Universal did not have the money; they did not have the required capital. We drew the curtain and took count of those that were there,” he said.
Commissioner Unaware of Reported Court Order
Omosehin also responded to reports that Universal Insurance had obtained a court order extending or otherwise affecting the revocation of its operating licence.
The commissioner said he was not aware of the reported order, stressing that no such court order had been received by the commission as of the time of the media briefing.
He maintained that, from NAICOM’s standpoint, the outcome of the recapitalisation exercise remained in effect and the licence remained revoked.
According to him, the resolution process involving affected companies was continuing, with liquidators taking over the management of the businesses in accordance with the regulatory process.
The commissioner’s comments place the reported court intervention against the backdrop of NAICOM’s position that the recapitalisation exercise had reached its prescribed conclusion for operators that failed to meet the requirements.
He nevertheless reiterated that the commission had sought to give operators opportunities to preserve their businesses through mergers and other strategic arrangements before the deadline.
Omosehin said the regulator’s responsibility was to enforce the applicable rules while protecting policyholders and ensuring that the insurance market remained financially sound.
The commission, he added, could not substitute regulatory compliance with informal arrangements or commitments that had not been concluded and presented within the timeframe provided for the recapitalisation exercise.
The fate of Universal Insurance and the reported legal challenge therefore remains a developing issue, particularly as questions persist over the company’s reported merger efforts and the status of its revoked licence.
