By Godswill Michael
The Federal Government has demanded a legal justification from the National Insurance Commission (NAICOM) for its assessment and demand for a one per cent capital injection fee from insurance companies participating in the ongoing industry recapitalisation exercise.
The demand followed a petition by NICON Insurance Limited (NICON) and Nigeria Reinsurance Corporation (Nig Re), which challenged fees imposed by NAICOM as well as the commission’s directive requiring insurance companies to transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN).
The Permanent Secretary, Federal Ministry of Finance, Raymond Omachi, conveyed the demand in a letter dated August 6, 2026, addressed to the Commissioner for Insurance, NAICOM.
In the letter, the ministry asked the commission to provide a “detailed response and legal justification” for the issues raised by the two insurance companies.
The query followed a petition dated July 27, 2026, submitted to the Ministry of Finance by NICON and Nig Re over the implementation of the recapitalisation requirements under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
According to the ministry’s letter, the companies raised “notable grievances” against NAICOM, particularly over the assessment and demand for a one per cent Capital Injection Fee, in addition to processing and verification charges.
The ministry said the charges were imposed pursuant to Appendix 2 of NAICOM’s Minimum Capital Requirement Guidelines and amounted to ₦305 million for NICON and ₦375 million for Nig Re.
The companies also questioned an additional ₦180 million capitalisation charge, which they described in their petition as questionable.
The ministry’s letter referred to the disputed one per cent charge as an “illegal fee” and asked NAICOM to explain the legal basis for the assessments.
The petitioners also challenged NAICOM’s directive requiring existing operational insurance companies to transfer their entire capital injection funds into an escrow account with the CBN.
According to the ministry, NICON and Nig Re argued that the directive was inconsistent with the 10 per cent statutory deposit requirement prescribed under Section 16(3) of NIIRA 2025.
The companies maintained that they had already complied with the statutory requirements and questioned the basis for transferring their entire recapitalisation funds into the CBN escrow account.
The Ministry of Finance consequently asked NAICOM to provide the legal justification for the directive.
The two companies also told the ministry that they had met the July 31, 2026 deadline for the recapitalisation exercise.
According to the petition, as summarised in the ministry’s letter, NICON injected ₦20 billion, while Nig Re injected ₦30 billion into Mudaraba Term Deposit accounts with Lotus Bank Limited.
The companies said the amounts exceeded their adjusted recapitalisation requirements of ₦16 billion for NICON and ₦28 billion for Nig Re.
They further stated that they had deposited ₦2.5 billion and ₦3.5 billion, respectively, with the CBN in compliance with Section 16(3) of NIIRA 2025.
The petitioners also said they had made initial fee payments of ₦80 million and ₦75 million, respectively.
While requesting NAICOM’s response, the Ministry of Finance directed the commission to suspend enforcement of the disputed charges and escrow directive against the two companies pending the determination of the petition.
“Pending the determination of the petition, the Commission should suspend the enforcement of the contested processing fees, 1% capital injection fee demands, and full-capital escrow transfer directives against NICON Insurance Limited and Nigeria Reinsurance Corporation,” Omachi wrote.