NICON Insurance Limited and Nigeria Reinsurance Corporation have emerged among the insurance companies facing possible liquidation after failing to satisfy key requirements of the National Insurance Commission’s recapitalisation exercise.
The recapitalisation programme, which began in July 2025 and ended on July 31, 2026, was designed to strengthen the financial capacity of insurance and reinsurance operators in Nigeria.
Following the exercise, NAICOM issued new operating licences to 43 companies it considered compliant, before subsequently recognising seven additional firms that had submitted their recapitalisation documents and evidence of payment of the required fees before the deadline.
However, NICON and Nigeria Re were not among the companies cleared for statutory capital verification.
Findings indicate that both companies had outstanding regulatory issues that complicated their attempts to meet the new capital requirements.
NICON’s Financial Records Under Scrutiny
For NICON, one of the major obstacles was its failure to produce audited financial statements acceptable to the regulator.
The company reportedly had no approved audited financial statements since 2019, leaving its financial position significantly outdated at the time of the recapitalisation exercise.
The absence of current financial records meant that NAICOM and appointed auditors could not reliably establish the company’s financial position or determine whether it had met the applicable capital threshold.
NICON was also said to have failed repeatedly to submit monthly recapitalisation progress reports within the required timelines, alongside other outstanding regulatory obligations.
The situation became more contentious in July 2026 when NICON reportedly notified the regulator of a capital injection of about N20 billion.
NAICOM subsequently requested updated capital computations, details of the investor, payment of the capital verification fee and evidence that the funds had been transferred into the designated Central Bank of Nigeria recapitalisation escrow account.
According to findings, NICON did not make the required transfer.
Instead, the company reportedly maintained that meeting the statutory deposit requirement was sufficient.
The regulator, however, treated the statutory deposit and recapitalisation escrow account as separate obligations, insisting that the latter was a mandatory condition for verification.
With the requirement unmet, NICON was not cleared for statutory capital verification, and none of the designated major audit firms conducted the verification exercise for the company.
Nigeria Re Also Falls Short
Nigeria Reinsurance Corporation encountered a different set of regulatory hurdles.
The company initially submitted a revised recapitalisation plan but was subsequently found to have deficiencies in its documentation and compliance process.
Among the issues reportedly identified were the absence of an appropriate board resolution, failure to provide capital status for specified reporting dates, failure to disclose statutory deposit shortfalls and submission of what was described as an unsigned and internally inconsistent recapitalisation plan.
Despite continued engagement with the regulator and the submission of progress reports, regulatory reviews reportedly found insufficient progress towards meeting the recapitalisation requirements.
The situation escalated in July when Nigeria Re notified NAICOM of a N30 billion capital injection.
The regulator requested supporting documentation, including updated capital calculations, evidence of the source of the funds, payment of verification fees and proof that the money had been transferred into the designated CBN escrow account.
Although some documents were reportedly submitted, the mandatory escrow transfer was not completed.
As a result, Nigeria Re was also not admitted for statutory capital verification.
Owner Challenges Regulator
The companies’ owner, businessman Jimoh Ibrahim, has disputed NAICOM’s position.
In an open letter addressed to President Bola Tinubu and published in national newspapers, Ibrahim displayed Lotus Bank cheques which he said represented N30 billion for Nigeria Re and N20 billion for NICON.
He accused NAICOM of making unlawful financial demands, including an alleged N500 million payment, one per cent of shareholders’ funds, an alleged N50 billion transfer requirement and N180 million in recapitalisation fees.
The allegations add a new dimension to the dispute, with the companies maintaining that they had made substantial financial commitments towards meeting the new capital requirements.
NAICOM’s position, however, centres on compliance with the prescribed verification process, particularly the requirement for recapitalisation funds to be transferred into the designated escrow account before statutory verification could begin.
Other Firms Also Missed the Cut
NICON and Nigeria Re were not the only operators affected by the exercise.
Universal Insurance, which had reportedly been performing relatively well before the deadline, was said to have pursued merger negotiations with another insurance company as its route to recapitalisation.
The company reportedly remained confident that the proposed transaction would be completed before the deadline.
However, the prospective merger partner eventually secured investment from a foreign investor, giving it sufficient capital to meet the requirements independently and effectively ending the proposed merger with Universal Insurance.
By then, according to findings, Universal Insurance had insufficient time to develop an alternative recapitalisation strategy.
The outcome highlights the pressure faced by operators that relied on mergers, acquisitions or fresh investment to meet the new capital thresholds.
With the deadline now passed, companies that failed to satisfy the regulator’s requirements face potentially severe consequences, including the loss of their operating licences and possible liquidation.
