Suspends NAICOM’s N680m fee
The Federal Ministry of Finance has stopped enforcement of about N680 million in disputed fees imposed by the National Insurance Commission (NAICOM) on NICON Insurance Limited and Nigeria Reinsurance Corporation (Nig Re) as part of the concluded insurance industry recapitalisation.
The ministry also directed NAICOM to suspend its demand that the two companies transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN), pending determination of a petition challenging the legality of the charges and the directive.
The intervention followed a July 27, 2026 petition by NICON and Nig Re over what they described as unlawful fees and regulatory demands arising from the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
In a letter to the Commissioner for Insurance, Olusegun Omosehin, dated August 6, the Permanent Secretary, Federal Ministry of Finance, Raymond Omachi, requested NAICOM to provide a detailed response and legal justification for the requirements.
The ministry directed the Commission to suspend enforcement of the contested processing and verification fees, the one per cent capital injection fee and the directive requiring the companies to transfer their full recapitalisation funds to a CBN escrow account.
The dispute centres on NAICOM’s assessment of a one per cent fee on capital injected by operators, as well as additional processing and verification charges prescribed in Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines.
According to the petition, the combined assessments amounted to N305 million for NICON and N375 million for Nig Re, bringing the disputed charges to N680 million.
The companies are challenging what they described as an unconstitutional requirement to transfer more than the statutory proportion of their recapitalisation funds to the CBN.
They contend that Section 16(3) of NIIRA 2025 provides for a 10 per cent statutory deposit and not the transfer of the entire capital injection into an escrow account. The companies told the ministry that they had already met the July 31, 2026 recapitalisation deadline.
NICON said it injected N420 billion, while Nig Re injected N30 billion into Mudaraba Term Deposit accounts with Lotus Bank Limited. The companies maintained that the amounts exceeded their respective adjusted recapitalisation requirements of N16 billion and N28 billion.
They further stated that they had deposited N42.5 billion and N43.5 billion respectively with the CBN, in compliance with the statutory deposit requirement under section 16(3) of the new law.
The companies also noted that they had made initial payments of N480 million and N75 million respectively in fees. The finance ministry’s directive effectively places the disputed charges and escrow requirement on hold while NAICOM is expected to justify the legal and regulatory basis for its actions.
The intervention could have wider implications for the insurance industry’s recapitalisation programme, particularly as eight operators have till end of the week to know their fate. The controversy also raises questions about the extent to which regulatory guidelines can impose additional financial obligations on operators beyond those expressly provided for under the enabling legislation.
NAICOM is expected to respond to the ministry’s request and explain the statutory basis for the one per cent capital injection fee, the additional processing and verification charges, and the requirement that the full capital injection be transferred into a CBN escrow account.