New Insurance Capital Rules: 12 Months to Comply or Lose Your License! ⚖️
The Nigerian Insurance Industry has entered a major reform era following the signing of the Insurance Industry Reform Act (NIIRA) into law by President Bola Tinubu.
What’s Changing?
The NIIRA introduces significantly higher minimum capital requirements for insurance and reinsurance companies — a move aimed at strengthening the industry and ensuring financial stability.
Here’s the breakdown of the new capital base:
• General Business Insurers : From ₦3 billion ➡️ ₦25 billion
• Life Insurance Underwriters ❤️: From ₦2 billion ➡️ ₦15 billion
• Reinsurance Firms : From ₦10 billion ➡️ ₦45 billion
⏳ The Deadline
• All existing operators have 12 months from the date the Act commenced to meet these new capital requirements.
• Failure to comply within the period will result in cancellation of operating licenses.
Public Disclosure of Compliance
• After the 12-month deadline, the National Insurance Commission (NAICOM) will publish the list of firms that met the new capital requirements within 30 days.
⚠️ Special Provisions
• NAICOM may demand even higher capital levels than the stated minimum for insurers, depending on:
• Size of the business
• Complexity of operations
• Risk profile of the company
• At commencement, 50% of the minimum capital must be deposited with the Central Bank of Nigeria (CBN)
• For new insurers, 80% of the statutory deposit will be refunded with interest within 60 days after registration.
• Existing companies must deposit 10% of their new minimum capital with the CBN.
Why This Matters for the Industry
• Stronger financial backing means more confidence from policyholders.
• Helps the sector compete with global standards.
• May lead to mergers, acquisitions, or exits of smaller players.
For investors, this could reshape Nigeria’s insurance sector, making it leaner, stronger, and potentially more profitable.
The Nigerian Insurance Industry has entered a major reform era following the signing of the Insurance Industry Reform Act (NIIRA) into law by President Bola Tinubu.
What’s Changing?
The NIIRA introduces significantly higher minimum capital requirements for insurance and reinsurance companies — a move aimed at strengthening the industry and ensuring financial stability.
Here’s the breakdown of the new capital base:
• General Business Insurers : From ₦3 billion ➡️ ₦25 billion
• Life Insurance Underwriters ❤️: From ₦2 billion ➡️ ₦15 billion
• Reinsurance Firms : From ₦10 billion ➡️ ₦45 billion
⏳ The Deadline
• All existing operators have 12 months from the date the Act commenced to meet these new capital requirements.
• Failure to comply within the period will result in cancellation of operating licenses.
Public Disclosure of Compliance
• After the 12-month deadline, the National Insurance Commission (NAICOM) will publish the list of firms that met the new capital requirements within 30 days.
⚠️ Special Provisions
• NAICOM may demand even higher capital levels than the stated minimum for insurers, depending on:
• Size of the business
• Complexity of operations
• Risk profile of the company
• At commencement, 50% of the minimum capital must be deposited with the Central Bank of Nigeria (CBN)
• For new insurers, 80% of the statutory deposit will be refunded with interest within 60 days after registration.
• Existing companies must deposit 10% of their new minimum capital with the CBN.
Why This Matters for the Industry
• Stronger financial backing means more confidence from policyholders.
• Helps the sector compete with global standards.
• May lead to mergers, acquisitions, or exits of smaller players.
For investors, this could reshape Nigeria’s insurance sector, making it leaner, stronger, and potentially more profitable.