Recapitalisation: We’ve not verified recapitalisation claims by insurance coys – NAICOM

Benjamin Orisemeke

The National Insurance Commission (NAICOM) disclosed that the Commission has yet to verify any recapitalisation claims by insurance companies.

National Commissioner for Insurance Mr. Olusegun Ayo Omosehin, who said this while fielding questions from Insurance journalists Tuesday in Abuja, also insisted that it would not extend the deadline for recapitalization.

According to him, any serious player in the industry should be able to meet the deadline.

The deadline for recapitalisation of insurance companies is 30^th July 2026.  

Explaining why the date would not be extended, the National Commissioner, who was represented by Deputy Commissioner for Insurance (Technical), Dr. Usman J. Jankara, said that the deadline is a product of the Nigeria Insurance Industry Reform Act (NIIRA) explaining that the Commission would first need to go to the National Assembly to amend the Act before the deadline can be amended.

He said: “Recapitalisation deadline will not be extended. It is in the law; it is not a journey we are willing to embark upon. Serious players should be able to meet the deadline.

Recapitalisation will draw funds into the industry. The more funds in the industry, the more you will take the operators serious. The exercise will bring new insurance companies that are viable and able to add value for Nigerians.

“The essence of capitalization is to force entities to raise additional funds. One of the easiest mechanisms for raising funds is through stock exchange, right?

“We have a very clear roadmap as to how to facilitate this. We’ve gotten assurances from the SEC to the effect that rather than having to wait for three months, they are able to conclude the request to raise funds within a short period of less than a week. So, for us, that is a good thing.”

Omosehin said the twin effect of inflation and fall in the value of the naira played a role in the need for the recapitalisation of the industry.

“And one of the reasons we’re having the industry capitalised is the fall in the value of the currency.

“And the fact that inflation has made a mess of the 2.5 and 5 billion minimum capital requests for entities. 2 billion as of 2007, when that exercise happened, was less than about $5 million. It was equal to about $20 million.

“Today, 2 billion is less than $2 million. So that was the narrative. It wasn’t that it will impact it.

“It won’t. And what it’s done is to draw capital to the sector. And we think that beyond having companies recapitalized is the fact that we’re going to have more serious players in the insurance industry.

“The weak ones that are the marginal players that have created some of the even challenges that we have, may probably not be able to meet or they will be forced to merge. And once you merge, the more your commitment financially, the more serious you take those entities. And so that was the point we made,” he said.

The NAICOM helmsman further said the Insurance Policy Owners Protection Fund will increase confidence in the industry. According to him, since there have not been any complaints from industry players, it showed that they are happy with the initiative.

“Now, there is a price to pay for stability. And I’ll give you an example. If the industry comes to you to say they want to insure your vehicle, that is worth a billion naira.

“But on the back of those billion naira is their capital gains, which is saying that’s a 50 billion, 45 billion naira. And they then tell you that beyond that N25 billion, we also have an insurance industry protection fund that is now N100 billion. And in the event that the company that is marketing insurance to you goes under, that fund is there to take care of that.

“I’m sure it will increase policy owners’ confidence and uptake. Because what gives insurance the wrong perception is entities that have gone underground and have not been able to meet that. And so, we’re trying to cure a more fundamental crisis in the market by that.

“And I’m sure if you engage with the market, they are quite happy with that. There’s been some engagement and agreement has been reached. So, we’ve actually done a guideline for that, that has been exposed to the market,” he further said.