The National Insurance Commission has warned that insurance and reinsurance firms that fail to meet the July 2026 recapitalisation deadline will face strict sanctions, including forced mergers or liquidation.

In a circular to all operators, Deputy Commissioner (Technical), Dr Usman Jankara, said the commission would not hesitate to enforce regulatory action against non-compliant companies.

The directive follows the enactment of the Nigerian Insurance Industry Reform Act 2025, which prescribes new Minimum Capital Requirements for industry players. Under the Act, life insurers must raise their capital base to N10bn, non-life firms to N15bn, and reinsurers to N35bn.

“Upon fulfilment of the new MCR, payment of requisite fees, and confirmation by the commission, successful companies will be issued new licences,” the circular stated. “Any company that fails to meet the prescribed MCR within the stipulated timeframe shall be subject to liquidation, merger, or any other regulatory resolution deemed appropriate by the Commission.”

The new rules took effect on July 31, 2025, the date of presidential assent, with insurers given 12 months to comply. NAICOM said it would soon release detailed guidelines covering the recapitalisation process, acceptable forms of capital, and procedures for verification.

Jankara further clarified that only admissible assets would count towards recapitalisation. Encumbered assets, those without perfected titles, and assets not fully in the company’s possession would be excluded. Assets exceeding prudential thresholds would also be deemed inadmissible.

The regulator added that it was engaging relevant authorities to secure incentives and concessions that could ease compliance. Jankara urged companies to begin preparations immediately and submit recapitalisation plans within the timeframe.

The move underscores NAICOM’s resolve to strengthen the insurance sector by ensuring only well-capitalised firms remain in operation.