FG Suspends Disputed Insurance Recapitalisation Fees After the NAICOM Query

NIGERIA—-The Federal Government has intervened in the growing controversy surrounding Nigeria’s insurance sector recapitalisation exercise.

Taiwo Oyedele, the Minister of Finance and Coordinating Minister for the Economy, has officially queried the National Insurance Commission (NAICOM) over contested regulatory fees imposed on operators.

Following a formal petition by NICON Insurance and Nigeria Reinsurance Corporation, the Ministry of Finance has directed NAICOM to suspend the enforcement of the disputed charges pending a final determination.

The Core of the Dispute

In a memo dated August 6, the Ministry of Finance ordered NAICOM to provide a detailed response and legal justification for several guidelines.

The petitioners are legally challenging three primary directives which include the 1% Capital Injection Fee, a levy charged on new capital brought into the firms.

Others are the Processing and Verification Charges, described as additional administrative fees contained in NAICOM’s Minimum Capital Requirement Guidelines and the Escrow Account Directive which is a mandate requiring existing operators to place 100% of their recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN).

For NICON Insurance, these extra fees total ₦305 million, while Nigeria Reinsurance Corporation faces ₦375 million in assessments.

Operators Argue Regulatory Overreach

The petitioning companies argue that NAICOM’s full escrow-transfer directive violates established law. They state the mandate exceeds the statutory 10% deposit prescribed under Section 16(3) of the Nigeria Insurance Industry Reform Act.

Both entities confirmed they met the July 31 recapitalisation deadline by executing the following financial moves. NICON Insurance for instance says it injected ₦20 billion into Mudaba Term Deposit Accounts with Lotus Bank.

Nigeria Reinsurance equally injected ₦30 billion into similar Lotus Bank accounts.

On statutory compliance, both firms deposited ₦2.5 billion with the CBN to satisfy the legal 10% threshold.

NAICOM Defends Guidelines

NAICOM has defended its position, stating that these requirements are part of standard guidelines issued last year.

The regulator claims that 43 insurance companies have already fully complied with the directives to complete their recapitalisation, while another eight companies currently awaiting verification have also followed the rules.

The Ministry of Finance’s intervention places these regulatory fees and asset management rules under strict scrutiny as the government reviews the legal boundaries of NAICOM’s enforcement powers.