Nigeria’s insurance industry is facing delays in accessing approximately N300 billion raised through its recently concluded recapitalisation exercise, as the Central Bank of Nigeria (CBN) continues verification procedures aimed at establishing the sources of the investments.
The development has reportedly disrupted insurers’ plans to deploy the fresh capital to strengthen operations, improve financial performance and generate returns for shareholders.
Although the National Insurance Commission (NAICOM) has approved the release of the funds, affected companies must still satisfy the CBN’s verification requirements before gaining access.
The additional scrutiny reportedly followed concerns about possible illicit financial inflows among investments made during the recapitalisation programme.
Speaking during a virtual briefing on the outcome of the Insurers Committee meeting, Chairman of the Nigerian Insurers Association (NIA), Ebelechukwu Nwachukwu, said operators were working to meet the outstanding requirements.
According to her, NAICOM had completed its responsibilities regarding the release of the funds, while insurance companies were making efforts to satisfy the apex bank’s conditions before the end of October.
The delay comes after the industry completed a major capital-raising exercise intended to strengthen the financial capacity of insurance and reinsurance companies.
Under the programme, 24 insurance companies reportedly raised a combined N300 billion in fresh capital.
The amount, together with existing industry capital exceeding N700 billion, increased the sector’s total capital base to approximately N1.079 trillion.
Of the 50 insurance firms that met the recapitalisation requirements, 26 had already exceeded the prescribed minimum capital thresholds, while the remaining 24 raised additional funds.
The exercise was conducted under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which introduced higher minimum capital requirements for insurance operators.
Under the legislation, life insurance companies were required to increase their capital from N2 billion to N10 billion, while non-life insurers faced an increase from N3 billion to N15 billion.
Reinsurance companies were also directed to raise their minimum capital from N10 billion to N35 billion.
The recapitalisation exercise ended on July 31, 2026, with participating firms required to hold their recapitalised funds in escrow accounts with the CBN.
Insurance operators had initially planned to begin deploying the additional resources during the third quarter to improve their financial results for the year.
Meanwhile, Commissioner for Insurance and NAICOM Chief Executive Officer Olusegun Omosehin has reaffirmed the regulator’s intention to ensure that the newly raised capital serves its intended purpose.
He said NAICOM would monitor how insurers utilise the funds to prevent mismanagement or diversion into unrelated activities.
For the affected companies, completing the CBN’s verification process remains the immediate priority before the capital can be deployed.
The situation highlights the challenge of balancing regulatory safeguards against illicit financial flows with insurers’ need for timely access to funds raised to strengthen the industry.
Ezeana Emmanuel
