Nigeria’s Finance Ministry has ordered the National Insurance Commission to suspend enforcement of disputed recapitalisation fees and escrow requirements against NICON Insurance and Nigeria Re pending a review of the companies’ petition.
The Federal Ministry of Finance has stepped into a brewing dispute between the National Insurance Commission and two major insurance institutions, directing the regulator to suspend enforcement of certain recapitalisation-related charges and directives against NICON Insurance Limited and Nigeria Reinsurance Corporation.
The directive, contained in a letter dated August 6, 2026, was signed by the Permanent Secretary of the Ministry of Finance, Raymond Omachi, on behalf of the Minister of Finance and Coordinating Minister of the Economy.
The letter was received by the National Insurance Commission on August 7.
The ministry said it was acting following a petition submitted by NICON and Nigeria Re on July 27 concerning the ongoing recapitalisation exercise being implemented under the Nigerian Insurance Industry Reform Act 2025.
N305m and N375m charges disputed
According to the ministry, the two companies complained about assessments by NAICOM involving a one per cent capital injection charge, as well as processing and verification fees.
The companies reportedly said the charges amounted to N305m for NICON and N375m for Nigeria Re.
They also challenged a directive requiring existing insurance companies to transfer their entire capital injection funds into an escrow account with the Central Bank of Nigeria rather than the 10 per cent statutory deposit provided for under Section 16(3) of NIIRA 2025.
The firms reportedly argued that the one per cent charge was unlawful, while describing an additional N180m recapitalisation charge as questionable.
They further challenged the requirement to place the full capital injection in escrow, describing it as unconstitutional.
The Finance Ministry has now asked NAICOM to provide a detailed response and legal justification for the disputed measures.
Companies say they met recapitalisation deadline
NICON and Nigeria Re maintained that they complied with the July 31, 2026, recapitalisation deadline.
According to the petition, NICON injected N20bn into a Mudaraba Term Deposit account with Lotus Bank, while Nigeria Re injected N30bn.
The companies said the amounts exceeded their respective adjusted capital requirements of N16bn and N28bn.
They also disclosed deposits of N2.5bn and N3.5bn with the CBN respectively, alongside initial payments of N80m by NICON and N75m by Nigeria Re to NAICOM.
The companies’ position is that these payments and capital injections demonstrate compliance with the recapitalisation requirements and therefore raise questions about the additional charges being demanded by the regulator.
Ministry orders suspension pending review
In its directive, the Finance Ministry ordered NAICOM to suspend enforcement of the disputed processing and verification fees, the one per cent capital injection charges and the requirement for full-capital escrow transfers against the two companies.
The suspension is to remain in place pending the ministry’s determination of the petition.
The development adds a new dimension to the implementation of NIIRA 2025, which introduced sweeping reforms aimed at strengthening the financial capacity and resilience of Nigeria’s insurance industry.
The recapitalisation exercise has already placed insurers under significant pressure to meet new capital requirements within the regulatory timeline.
N180m consultant fee becomes flashpoint
The dispute escalated after NICON and Nigeria Re wrote an open letter to President Bola Ahmed Tinubu on August 5, alleging that NAICOM had imposed unlawful and unconstitutional financial demands on the companies.
Among their complaints was an alleged N180m recapitalisation regulation fee said to be intended to pay a consultant engaged to verify the recapitalisation exercise.
The companies questioned the legal basis for the charge.
NAICOM’s position on the allegations was not immediately available.
Efforts to obtain the commission’s response to the claims were unsuccessful, with the regulator reportedly not responding to calls and messages.
The Finance Ministry’s intervention means the dispute will now undergo further scrutiny, potentially setting an important precedent for how recapitalisation charges, statutory deposits and verification costs are administered under Nigeria’s new insurance law.
For the wider insurance industry, the outcome could have implications beyond NICON and Nigeria Re, particularly for insurers seeking clarity on the financial obligations attached to the ongoing recapitalisation programme.
