June 30, 2026 marks the conclusion of NAICOM’S capital verification exercise for Nigerian insurance and reinsurance companies. July 30, 2026 is the final compliance deadline. This is the last month in which preparation can be made, governance documented, and risk managed before the deadline determines which operators survive and which do not.
Where the Recapitalisation Process Stands
The Nigerian Insurance Industry Reform Act 2025 (NIIRA 2025) – signed into law by President Bola Ahmed Tinubu on July 31, 2025, repealing the Insurance Act 2003 and consolidating related legislation into a single framework – introduced minimum capital requirements that represent a fundamental restructuring of Nigeria’s insurance market.
The minimum capital requirements under NIIRA
2025, as implemented by NAICOM’s
Recapitalisation Guidelines issued pursuant to the Act, are as follows:
• Life insurers: N10 billion (increased from N2
billion under the Insurance Act 2003)
• Non-life (general) insurers: N15 billion (increased from N3 billion)
• Composite insurers: N25 billion, with an additional obligation to restructure into separate life and non-life entities within five years of the Act’s commencement
• Reinsurance companies: N35 billion (increased from N10 billion)
These thresholds are embedded in primary legislation. Unlike NAICOM’s earlier, unsuccessful recapitalisation attempts – including its 2018 directive, which was struck down by the Federal High Court on the grounds that the regulator could not raise capital thresholds unilaterally without legislative backing — the NIIRA 2025 requirements cannot be varied by NAICOM without a return to the National Assembly for amendment and fresh presidential assent.
NAICOM’s Commissioner for Insurance has stated publicly that the Commission does not intend to pursue an extension.
NAICOM’s recapitalisation guidelines established a multi-stage compliance process with the following key milestones:
Milestone
Deadline
Recapitalisation plans submitted to NAICOM
September 30, 2025
Capital verification exercise begins
November 1, 2025
Evidence of statutory deposits with CBN submitted
May 30, 2026
Capital verification exercise concludes
June 30, 2026
Final compliance deadline
July 30, 2026
The capital verification exercise – during which
NAICOM, with the assistance of appointed Big Four audit firms, examines evidence of ownership, title, and valuation of admissible assets, supported by actuarial reports — has been running since November 2025. The CBN statutory deposit deadline of May 30, 2026 has now passed. The verification exercise closes June 30.
As of early June 2026, a significant number of insurers remain in various stages of the verification process, with multiple applications still under review. Industry sources indicate that at least 12 companies are materially behind in meeting the new capital requirements. For some, mergers with better-capitalised operators are in progress. For others, the path to compliance remains unclear.
The Director Liability Dimension
For directors of insurance companies, the most important legal principle governing this period is not the recapitalisation threshold itself. It is the personal liability framework under the Companies and Allied Matters Act 2020 (CAMA 2020) within which the board’s management of the recapitalisation process will be assessed if the company subsequently fails.
Section 311 of CAMA 2020 imposes a duty of care, skill, and diligence on every Nigerian director. The standard is both objective – measured against what a reasonably diligent person with the general knowledge, skill, and experience that may reasonably be expected of a person carrying out the functions of a director – and subjective, calibrated to the actual knowledge, skill, and experience that the individual director in fact possesses. A director with specialist financial or insurance expertise is held to that higher standard.
Applied to the recapitalisation process, a director who was present on the board during the period leading to the July 30 deadline and who cannot demonstrate active, documented engagement with the process – who did not interrogate the capital plan, who did not seek independent verification of the company’s capital position, who did not ensure that the board was receiving accurate information about compliance progress, who did not raise concerns where the company appeared to be falling short – has not discharged the duty the statute imposes.
CAMA 2020 further provides, under Section 312, that directors must act in good faith in what they consider to be the interests of the company and must not allow the company to continue incurring liabilities when there is no reasonable prospect of meeting them. This provision is directly relevant where a company’s non-compliance with the NIIRA 2025 capital requirements becomes, or should become, apparent to the board during the verification period.
If a company is subsequently wound up, transferred, or deregistered following failure to meet the July 30 deadline, the conduct of directors in this period will be scrutinised. The documentation created now – board minutes recording the questions asked and the answers received, resolutions approving specific capital actions, records of the advisers engaged and the advice received — is the evidence that will determine whether directors can demonstrate that they met the statutory standard.
Directors of insurance companies must be creating that documentation now, in June, while it can still reflect genuine engagement rather than a retrospective reconstruction of decisions already made. A board resolution approving a capital plan, drafted in August after the deadline has passed, is not equivalent to a board resolution from June, recorded contemporaneously.
The Composite Insurer Dimension
One category of operator requires specific attention that has received limited commentary: composite insurers. Under NIRA 2025, composite insurance — the conduct of both life and non-life business under a single licence – is being phased out. Insurers currently holding composite licences must meet the N25 billion minimum capital requirement and must, within five years of the Act’s commencement (i.e., by July 31, 2030), restructure into separate, independently licensed life and non-life entities.
This creates a dual governance obligation for composite insurer boards: immediate compliance with the N25 billion threshold for the July 30, 2026 deadline, alongside a medium-term structural reorganisation plan that must be documented and in progress. For directors of composite insurers, the absence of both a credible recapitalisation plan and a five-year restructuring roadmap represents a compounding governance failure under the CAMA 2020 framework.
The Policyholder and Corporate Client
Position
The practical question for Nigerian businesses holding insurance policies with operators in the at-risk category is straightforward but requires active engagement to answer: will my insurer still be authorised to honour claims after July 30?
NIIRA 2025 provides NAICOM with tools to manage the exit of non-compliant operators in a way that provides some protection to policyholders. Under the Act, NAICOM may transfer policy portfolios to solvent operators, appoint managers to run an insurer in difficulty, or initiate orderly wind-down procedures.Each of these mechanisms provides a degree of continuity
— but none of them is instant, and none guarantees that a claim submitted in the immediate post-deadline period will be resolved without disruption or delay.
NAICOM has also now operationalised the Insurance Policyholders’ Protection Fund (IPPF), established under NIIRA 2025 and governed by the Guidelines for the Collection, Management, and Administration of the Insurance Policyholders’ Protection Fund issued by NAICOM in April 2026 (Circular Ref. NAICOM/DIR/CIR/79/2026). All licensed insurers and reinsurers are required to contribute 0.25 per cent of their annual net premium income to the IPPF, which functions as a statutory financial backstop for policyholders in the event of insurer insolvency. Failure to remit contributions constitutes grounds for suspension or cancellation of an operating licence. The IPPF provides a meaningful structural improvement over the pre-NIIRA 2025 position, where policyholders of failed insurers historically had no guaranteed recourse. However, the Fund is early-stage and should not be relied upon as a substitute for ensuring that your current insurer is solvent.
For corporate clients whose operations depend on continuous statutory insurance coverage – in aviation, construction, oil and gas, banking, and other regulated sectors – coverage disruption is not merely inconvenient. It creates potential liability for operating without the required statutory coverage during any gap in the transfer process. NIIRA 2025 has expanded the categories of compulsory insurance, adding construction risk insurance for multi-storey buildings and third-party property damage cover for petroleum and gas stations to the existing compulsory insurance framework. For businesses in these sectors, the consequences of a coverage gap are direct and immediate.
The appropriate action for corporate clients this month is to contact current insurers directly and
request written confirmation of:
1. Their recapitalisation status and progress toward the July 30 deadline
2. Their CBN statutory deposit compliance
3. Their coverage continuity commitment through and beyond the July 30 deadline
4. In the case of composite insurers, the status of their five-year restructuring plan
Where the response is unsatisfactory or incomplete, the time to seek alternative coverage from a financially sound operator is now, not August 1.
The Regulatory Opportunity
Not every aspect of the NIIRA 2025 recapitalisation is a risk story. For well-capitalised operators, for acquirers of insurance businesses, and for institutional investors assessing the post-recapitalisation landscape, June and July 2026 represent a market opportunity of the kind that structural reform generates.
Nigeria’s insurance market remains deeply underpenetrated relative to the country’s economic scale, with insurance penetration below 1 per cent of GDP. A market of stronger, fewer, better-capitalised operators – with greater regulatory credibility, an enhanced policyholder protection infrastructure, and a consumer confidence foundation built on the mandatory claims settlement requirements of NIIRA 2025 (which require all admitted claims to be paid within 60 days of notification, with compound interest accruing on late payments) – represents a significantly more attractive investment proposition than the fragmented, undercapitalised market that preceded NIIRA 2025.
It is also worth noting that the structural basis for
NAICOM enforcement has changed. Previous recapitalisation attempts could be, and were, challenged in court. With the capital thresholds now embedded in primary legislation under NIIRA 2025, that avenue is substantially closed. This gives the post-recapitalisation regulatory environment a credibility that earlier reform initiatives lacked.
The legal framework for insurance sector M&A under the Act – including the transfer of business provisions, the merger approval process under NAICOM, and the role of the Securities and Exchange Commission (SEC) in facilitating capital market participation in recapitalisation (SEC established a dedicated fast-track desk for insurance recapitalisation in September 2025, committing to a 14-day decision window on complete submissions) – provides a defined pathway for transactions that are currently in progress and for those that will follow the July 30 deadline.
What Every Stakeholder Must Do This Month
Directors of insurance and reinsurance companies: Ensure that board engagement with the recapitalisation process in June is documented in board minutes that record the specific questions asked, the capital actions approved, the advisers engaged, and the basis for every material decision. For composite insurer boards, ensure the five-year restructuring obligation is also on record as an active board-level matter. A director who cannot produce this documentation cannot demonstrate compliance with the duty of care and diligence imposed by Section 311 of CAMA 2020.
Policyholders and corporate clients: Contact your insurer this month and request written confirmation of its recapitalisation and CBN
statutory deposit status. Do not wait for the July 30 deadline to force the issue. Written
confirmation creates a record that is relevant to any subsequent coverage dispute.
Businesses with statutory insurance obligations: Assess coverage continuity as a governance priority. Brief directors on insurance solvency risk as a live board-level matter. Identify alternative insurers where current exposure is significant, particularly in sectors where NIIRA 2025 has expanded the scope of compulsory insurance.
Investors and acquirers: The window for NIIRA
2025-related transactions is closing. Legal advisers with knowledge of the Act’s transfer of business and merger provisions are needed now.
Transactions requiring NAICOM and SEC approval that are not well advanced before July 30 face a more compressed and unpredictable post-deadline environment.