Insurance companies that raised approximately ₦300 billion in fresh capital during Nigeria’s recently concluded recapitalisation exercise are facing delays in accessing the funds, which remain with the Central Bank of Nigeria (CBN) pending verification of their sources.
According to Vanguard, the apex bank introduced stricter capital verification procedures following concerns that some investments in the insurance sector might have originated from illicit sources. The additional requirements have reportedly made it difficult for several insurance firms to complete the process.
Although the National Insurance Commission (NAICOM) has approved the release of the funds to the affected insurers, the companies are still working to satisfy the CBN’s requirements.
Speaking during a virtual press briefing on the outcome of the Insurers Committee meeting, the Chairman of the Nigeria Insurers Association (NIA), Mrs Ebelechukwu Nwachukwu, said the regulator had completed its part of the process.
Nwachukwu explained that insurance operators were now working to meet the CBN’s criteria, with the aim of gaining access to the funds on or before the end of October.
The insurers had planned to deploy the new capital in the third quarter of 2026 to strengthen their financial performance and provide attractive dividend returns to investors who supported the recapitalisation exercise.
During the exercise, 24 insurance companies collectively raised ₦300 billion in fresh capital. Added to the industry’s existing capital of more than ₦700 billion, the funds brought total industry capital to approximately ₦1.079 trillion after recapitalisation.
The Nigerian Insurance Industry Reform Act (NIIRA), 2025, required underwriting firms and reinsurers participating in the exercise, which ended on July 31, 2026, to keep their recapitalised funds in an escrow account with the CBN.
Of the 50 firms that met the recapitalisation requirements, 24 raised additional capital, while the remaining 26 had already exceeded the prescribed minimum capital thresholds.
Under the requirements, life insurance companies were required to increase their minimum capital from ₦2 billion to ₦10 billion, while non-life insurers had to raise theirs from ₦3 billion to ₦15 billion. Reinsurance companies were required to increase their minimum capital from ₦10 billion to ₦35 billion.
The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr Olusegun Omosehin, had earlier announced that total capital in the insurance industry had risen to ₦1.079 trillion from approximately ₦700 billion before the exercise.
Omosehin said NAICOM intended to allow insurance operators access to the recapitalisation funds while monitoring how the money was used. He stressed that the regulator would ensure the funds served their intended purpose and were not mismanaged or diverted to unrelated activities.
Source: Vanguard
