By Kehinde Ibrahim, Lagos
THE completion of Nigeria’s latest insurance industry recapitalisation exercise has left a number of operators outside the list of companies cleared to continue operations, with regulatory compliance, financial reporting and failure to meet key verification requirements emerging as major factors behind the exclusions.
The National Insurance Commission, NAICOM, the industry’s regulatory authority, recently approved new operating licences for 43 insurance and reinsurance companies that met its requirements, before adding another seven firms whose recapitalisation documents and evidence of payment of the prescribed fees were submitted before the July 31, 2026 deadline. The additional approvals brought the number of firms cleared under the exercise to 50.
The recapitalisation exercise was implemented under the Nigeria Insurance Industry Reform Act ,NIIRA, 2025, which commenced in July 2025 and set July 31, 2026 as the deadline for insurers and reinsurers to meet the new minimum capital requirements
Among the companies that did not make the approved list were NICON Insurance Limited, Nigeria Reinsurance Corporation, Universal Insurance Plc and African Alliance Insurance Plc.
Sources familiar with the regulatory process said the failure of some of the affected companies to meet longstanding reporting and compliance obligations played a significant role in their exclusion from the final list.
According to the sources, some of the companies had outstanding regulatory issues dating back several years, including failure to submit audited financial statements, delays in obtaining approval for financial statements and non-compliance with other requirements imposed on operators in the sector.
The sources further disclosed that some of the affected companies had not obtained approved financial statements since 2019, while some were unable to provide the required 2024 approved audited financial statements during the latest recapitalisation exercise.
The absence of current and approved financial statements, according to the sources, created difficulties in determining the true financial position of some operators and prevented auditors and the regulator from completing the required capital verification process.
NAICOM had allowed companies that submitted their recapitalisation documents and evidence of payment of the required fees before the July 31 deadline to proceed to the verification stage. Their documents were subsequently reviewed by appointed audit firms, with auditors given an additional 14 days to complete their assessment.
However, companies that failed to satisfy the conditions for statutory capital verification could not proceed through the same process.
One of the companies identified in the findings had, according to sources, been involved in regulatory compliance challenges dating back to the previous recapitalisation exercise initiated in 2019.
The company was said to have failed to submit audited financial statements for several years. By the time of the latest recapitalisation exercise, it reportedly did not have the required 2024 approved audited financial statement.
The absence of up-to-date financial records meant that both the regulator and appointed auditors could not establish an accurate picture of the company’s financial position for the purpose of capital verification.
The company was also said to have repeatedly failed to submit monthly recapitalisation progress reports within the prescribed timelines, alongside other outstanding regulatory obligations.
Universal Insurance, however, was reportedly in a different situation. Sources said the company had been engaged in discussions over a possible merger with another operator before the recapitalisation deadline.
According to the sources, Universal Insurance had expected the merger arrangement to provide a pathway for meeting the new capital requirements and continued negotiations with its prospective partner.
However, the situation reportedly changed after the proposed merger partner secured significant investment from a foreign investor, enabling it to independently meet the recapitalisation requirements.
With the partner no longer requiring the merger arrangement, the proposed transaction with Universal Insurance was effectively discontinued.
By the time the development occurred, sources said, Universal Insurance had limited time to put an alternative recapitalisation strategy in place before the July 31 deadline.
