The National Insurance Commission (NAICOM) has taken a firm stance, declaring that there will be no extension granted for the ongoing recapitalisation exercise within Nigeria's insurance sector. The commission asserts that the deadline is legally binding and cannot be altered.
No Extension: A Matter of Law
This definitive position was communicated by Dr Usman Jankara, the Deputy Commissioner for Insurance (Technical) at NAICOM. He represented the Commissioner for Insurance, Olusegun Omosehin, during an interactive session with insurance journalists in Abuja.
Dr Jankara stated unequivocally that the recapitalisation deadline of July 30, 2026, as stipulated in the Nigerian Insurance Industry Reform Act 2025, is final. He explained that any change would require a complex legislative amendment process, involving the National Assembly and presidential assent, a path the commission is not willing to pursue.
"Once it's the law, nobody has the power to extend what the law has indicated as a deadline," Jankara emphasised. He expressed confidence that the timeline is reasonable and achievable for serious operators, ultimately leading to a more robust insurance industry.
NDIC's Operational Challenge
In a related development, the Nigeria Deposit Insurance Corporation (NDIC) has highlighted a significant operational constraint. The corporation's Managing Director, Thompson Sunday, revealed that the mandatory remittance of 50 per cent of its earnings to the Federal Government is limiting its capacity to build a sufficient Deposit Insurance Fund (DIF).
Sunday made this known during a courtesy visit to Dr Armstrong Takang, the Managing Director of the Ministry of Finance Incorporated (MOFI). This engagement was part of NDIC's stakeholder outreach following Sunday's appointment in July 2025.
While reaffirming NDIC's strict compliance with the Fiscal Responsibility Act (FRA) 2007, Sunday pointed out that the government's cost-to-income ratio policy directly impacts the fund. These deductions affect NDIC's ability to accumulate the robust financial reserve needed to promptly reimburse depositors in case of bank failures.
Implications for Financial Safety
The NDIC chief underscored that international best practices, as set by the International Association of Deposit Insurers (IADI), require deposit insurers to maintain adequate funds independently to protect depositors without relying on government bailouts.
The simultaneous announcements from NAICOM and NDIC paint a picture of a financial regulatory environment grappling with strict legal mandates and fiscal policies. On one hand, NAICOM is pushing the insurance industry towards greater capitalisation under an immutable deadline. On the other, NDIC, a key pillar of the banking sector's safety net, is signalling that its ability to fulfil its core mandate is being strained by existing revenue-sharing arrangements with the government.
These developments are crucial for stakeholders, including insurance companies racing to meet the recapitalisation target and banking customers whose deposits are backed by the NDIC's fund.
