The National Insurance Commission (NAICOM) has announced new Minimum Capital Requirements (MCR) and a Risk-Based Capital (RBC) framework for Nigeria’s insurance sector, following the signing of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 by President Bola Tinubu.
In a circular issued in Abuja, NAICOM directed all insurance and reinsurance companies to comply with the revised requirements on or before July 30, 2026. Failure to meet the deadline, it warned, will attract severe sanctions, including liquidation, merger, or other regulatory actions deemed necessary.
The new framework raises the minimum capital thresholds significantly: N10 billion for life insurers, N15 billion for non-life insurers, N25 billion for composite companies, and N35 billion for reinsurers. The Act also introduces a full shift to a risk-based capital system, designed to ensure that insurance companies’ capital levels align with the scale and nature of their risk exposures.
According to NAICOM, the new MCR took effect immediately from the date of presidential assent on July 31, 2025, with a 12-month compliance window. The regulator added that further guidelines will soon be released to clarify issues such as the composition of capital, acceptable forms of capital, procedures for verification, and qualifying assets that can be used to meet the new requirements.
“All assets for the purpose of the new MCR shall be subject to verification by the Commission or its appointed agents,” the circular stated. It further noted that where additional scrutiny is required for specific assets, the cost of verification would be borne by the concerned insurer or reinsurer.
The reforms mark one of the most significant changes in Nigeria’s insurance landscape in years, aimed at strengthening the financial resilience of the sector, protecting policyholders, and promoting greater market stability.
