The Federal Ministry of Finance has directed the National Insurance Commission to provide legal justification for the N680 million recapitalisation-related charges imposed on NICON Insurance Limited and Nigeria Reinsurance Corporation.

The ministry also ordered NAICOM to suspend enforcement of the disputed fees pending the resolution of a petition filed by the two companies.

The directive was contained in a letter dated August 6, 2026, according to Nairametrics on Monday.

The letter was signed by the Permanent Secretary of the Federal Ministry of Finance, Raymond Omachi, on behalf of the Minister of Finance and Coordinating Minister of the Economy.

The directive represents the latest development in the dispute over the implementation of the Nigerian Insurance Industry Reform Act 2025, which introduced higher minimum capital requirements for insurance and reinsurance companies.

According to the letter, the ministry received a petition dated July 27, 2026, from NICON Insurance and Nigeria Re over the ongoing recapitalisation exercise under the NIIRA 2025.

The companies challenged NAICOM’s assessment of a 1 per cent capital injection fee, as well as additional processing and verification charges imposed under Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines.

The ministry said NAICOM assessed N305 million against NICON Insurance and N375 million against Nigeria Re, bringing the total disputed charges to N680 million.

“The petitioners have raised notable grievances against the Commission regarding the assessment and demand for a 1% Capital Injection Fee alongside additional processing and verification fees pursuant to Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines, amounting to N305 million for NICON and N375 million for Nig Re,” the letter read.

The companies also challenged NAICOM’s directive requiring existing insurance operators to transfer their entire capital injection funds into an escrow account with the CBN.

According to the ministry, the companies argued that NAICOM’s directive was contrary to Section 16(3) of NIIRA 2025, which requires insurers to maintain only a 10% statutory deposit with the Central Bank of Nigeria.

The Finance Ministry said the firms also maintained that they had fulfilled the July 31, 2026, recapitalisation deadline, having injected N20 billion into NICON Insurance and N30 billion into Nigeria Re through Mudaraba Term Deposit accounts with Lotus Bank Limited.

They further argued that the amounts injected were above their respective adjusted capital requirements of N16 billion for NICON Insurance and N28 billion for Nigeria Respectively.

The letter also disclosed that NICON had already paid N80 million, while Nigeria Re had paid N75 million toward the disputed charges.

The Finance Ministry requested that NAICOM provide a detailed response outlining the legal basis for the contested charges and directives.

“In view of the above, you are requested to provide a detailed response and legal justification regarding the issues raised,” the ministry said.

Pending the resolution of the petition, the ministry directed the insurance regulator to suspend enforcement of the disputed charges and related directives against the two companies.

“Pending the determination of the petition, the Commission should suspend the enforcement of the contested processing fees, 1% capital injection fee demands, and full-capital escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Cor