Yemisi Izuora
The National Insurance Commission (NAICOM) has reassured policyholders of insurance firms that did not meet up in the just concluded recapitalization exercise of full protection of their policy.
The NAICOM addressed the concerns over the status of policyholders of companies whose licences were cancelled following the conclusion of the exercise, during media engagement in Lagos on Friday.
The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr. Olusegun Ayo Omosehin, said that the affected entities remain protected, explaining that the first layer of protection would involve liquidators or receivers appointed to realise the assets of the companies and attend to policyholder obligations.
He noted, however, that some affected entities had chosen to challenge the process in court, meaning that the relevant processes would have to be completed before the resolution of their policyholder obligations could proceed.
Omosehin further explained that where the assets of an affected entity are insufficient to meet its total obligations to policyholders, the Policyholders Protection Fund would be available to cover the gap.
He clarified that the affected companies could no longer write insurance business following the cancellation of their licences, effective August 1.
According to him, policyholders seeking to renew their insurance arrangements with such entities would have to move their policies to existing licensed insurance companies.
The Commissioner said the recapitalisation exercise had now moved beyond the capital-raising phase, with the focus shifting to a stronger and more financially capable insurance market.
The Commissioner also disclosed that the recently concluded insurance industry recapitalisation exercise generated about ₦1.079 trillion in capital, with 24 insurance companies transferring funds into the recapitalisation escrow account.
Omosehin, however, clarified that the 24 companies that transferred funds into the escrow account should not be taken to mean that only those companies raised capital during the exercise, explaining that some operators already had sufficient capital to meet the new requirements.
He said, “24 companies moved money to the account. Those are the companies that went to raise capital. It is not everybody that needs us to raise company.”
According to him, some companies already had capital in excess of the new regulatory requirement, making fresh capital raising unnecessary.
Giving an example, the Commissioner said a company operating only general insurance business already had more than ₦57 billion in capital.
Omosehin stressed that the recapitalisation exercise had revealed the presence of both serious investors and companies with varying levels of financial strength within the insurance market.
“There are serious investors in this market, serious companies, unserious, people should not continue to hold us back,” he said.
The Commissioner said the capital generated through the exercise would strengthen the financial capacity of operators and position the industry to take on larger risks.
The recapitalisation was implemented under the new regulatory framework introduced through the Nigerian Insurance Industry Reform Act (NIIRA) 2025, with new minimum capital requirements for insurance operators.