NICON, Nigeria Re lose licences as Nigeria enforces insurance recapitalisation

Nigeria Reinsurance Corporation has become the first casualty of the country’s insurance sector recapitalisation, losing its operating licence alongside sister firm NICON Insurance Limited. The National Insurance Commission (NAICOM) revoked the licences after determining the companies failed to meet the new minimum capital requirements. Dr Muiz Banire has been appointed as Receiver and Provisional Liquidator for Nigeria Re, and the regulator has frozen the company's bank accounts.

The revocation stems from a dispute over the technical mechanics of compliance. NICON and Nigeria Re, both linked to businessman and senator Jimoh Ibrahim, petitioned the government arguing they had satisfied the July 31, 2026 deadline. The companies claimed they injected N20 billion into NICON and N30 billion into Nigeria Re through Mudaraba Term Deposit accounts at Lotus Bank. They also pointed to statutory Central Bank of Nigeria deposits of N2.5 billion and N3.5 billion respectively.

NAICOM rejected these assertions, emphasising that capital injections alone do not equal full compliance. The regulator mandated that operators transfer funds into a dedicated escrow account at the central bank, a step the companies bypassed. A NAICOM source noted they fulfilled only two of five statutory requirements, omitting the escrow transfer and a 1% fee, asking: "If he had raised the money, why is he afraid of transferring the money to the Escrow Account with the CBN? All other companies did."

For market participants, the dispute highlights the strict enforcement posture driving Nigeria’s insurance overhaul. Under the finalized framework, non-life insurers must hold N15 billion, life insurers N10 billion, composite insurers N25 billion, and reinsurers N35 billion. The exclusion of Ibrahim’s firms confirms that 43 operators successfully navigated the 12-month exercise. This consolidation is expected to strengthen the sector's capacity to underwrite large domestic risks without excessive reliance on foreign reinsurers.

Ibrahim’s opposition to the new thresholds was established during the legislative process. During Senate plenary sessions in December 2024, he argued the N35 billion reinsurance requirement was "completely out of order" and warned it would weaken indigenous capacity. Senator Mukhail Adetokunbo Abiru, chairman of the banking committee, countered that the figure was a compromise reduced from an initial N45 billion proposal, and Ibrahim’s motion to retain the lower threshold failed to secure a seconder.