Insurance recapitalisation: Oyedele queries NAICOM over fees, escrow funds

Nigeria's Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has initiated a formal inquiry into the National Insurance Commission (NAICOM) concerning fees and directives imposed on insurance firms undertaking recapitalization.

The query stems from petitions lodged by NICON Insurance Limited and Nigeria Reinsurance Corporation. These companies contest NAICOM's imposition of a one percent Capital Injection Fee and other charges. They also challenge the commission's mandate for insurers to transfer their entire capital injection funds into an escrow account with the Central Bank of Nigeria (CBN).

A memo from the Ministry of Finance, signed by Permanent Secretary Raymond Omachi on behalf of the minister, directed NAICOM to provide a detailed justification for these requirements. Crucially, the ministry ordered a halt to the enforcement of the disputed processing fees, the one percent Capital Injection Fee, and the full capital escrow transfer directive for NICON and Nigeria Re until their petitions are resolved.

NICON and Nigeria Re argue that these financial obligations exceed statutory requirements. They specifically cite the one percent Capital Injection Fee, along with processing and verification fees outlined in NAICOM's Minimum Capital Requirement Guidelines, which they calculate to be N305 million for NICON and N375 million for Nigeria Re. Furthermore, the companies object to NAICOM's directive for a full capital escrow transfer, asserting that Section 16(3) of the Nigeria Insurance Industry Reform Act (NIIRA), 2025, mandates only a ten percent statutory deposit.

The two firms claim they met the July 31, 2026, recapitalization deadline by injecting N20 billion into NICON and N30 billion into Nigeria Re, exceeding their adjusted requirements. They also state they have made the required ten percent statutory deposits with the CBN and paid initial fees. NAICOM, however, maintains that these requirements are not new and have been complied with by other recapitalized companies.

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All these are requirements released since last year in the Guidelines which all the recapitalised 43 companies and the eight awaiting verification have complied with.