The National Insurance Commission (NAICOM) has revoked the operating licence of Nigeria Reinsurance Corporation (Nigeria Re) with immediate effect, citing the company's failure to meet the new recapitalisation requirements. The regulator has also frozen the company's bank accounts and directed policyholders to transfer their policies to other licensed reinsurers.
Regulatory Action and Immediate Consequences
In a circular dated August 6, 2026, NAICOM stated that Nigeria Re's licence revocation is a result of the company's inability to recapitalise to the new minimum paid-up share capital of N25 billion for reinsurance companies, as stipulated in the 2023 recapitalisation guidelines. The commission said the decision was taken after several extensions and grace periods, which the company failed to utilise.
NAICOM's Head of Corporate Affairs, Mr. Rasaaq Salami, confirmed the development, saying, "The revocation is in line with the Commission's mandate to ensure the stability and soundness of the insurance industry. Nigeria Re has not met the required capital threshold, and we have no choice but to take this action to protect policyholders and the industry at large."
As a result of the revocation, Nigeria Re's bank accounts have been frozen, and the company is prohibited from underwriting new business or renewing existing policies. Policyholders who have active policies with Nigeria Re are advised to contact their insurance brokers or NAICOM to arrange for transfer of their policies to other licensed reinsurers, such as African Reinsurance Corporation or Continental Reinsurance.
Background and Recapitalisation Exercise
The recapitalisation exercise, which began in 2023, required all insurance and reinsurance companies in Nigeria to increase their minimum paid-up share capital. For reinsurance companies, the requirement was raised from N10 billion to N25 billion. The deadline was initially set for December 31, 2025, but was later extended to June 30, 2026, after industry pressure.
According to NAICOM, several companies have complied with the new requirements, but Nigeria Re failed to do so. The company, which is majority-owned by the federal government, had been struggling to raise the additional N15 billion needed. Despite government assurances of support, the capital injection did not materialise before the deadline.
Impact on the Insurance Industry and Policyholders
Nigeria Re was one of the oldest reinsurance companies in the country, having been established in 1977. Its exit from the market could have implications for the industry, as it provided reinsurance capacity for many primary insurers. However, NAICOM has assured that the industry remains stable and that other reinsurers have sufficient capacity to absorb the business.
"The revocation of Nigeria Re's licence will not lead to a crisis in the industry. We have assessed the market and are confident that other reinsurers can handle the portfolio," Salami added.
Policyholders with claims against Nigeria Re are advised to contact NAICOM for guidance. The commission has set up a dedicated desk to handle queries and ensure a smooth transition.
Next Steps and Industry Reactions
Industry analysts have mixed reactions. Some believe the revocation is a positive step towards enforcing discipline in the industry, while others argue that the federal government's failure to recapitalise its own company is embarrassing. The Nigeria Insurers Association (NIA) has called for an urgent meeting with NAICOM to discuss the way forward and the potential impact on the market.
In the meantime, NAICOM has stated that it will continue to monitor the industry and may take similar actions against other non-compliant companies. The commission has also urged all insurance companies to ensure they meet the recapitalisation requirements to avoid sanctions.
