The Federal Government has stepped into the controversy surrounding Nigeria’s ongoing insurance sector recapitalisation, with the Minister of Finance and Coordinating Minister for the Economy, Taiwo Oyedele, querying the National Insurance Commission, NAICOM, over fees imposed on insurance companies.
The intervention follows a petition by NICON Insurance and Nigeria Reinsurance Corporation, challenging the legality of a one-percent Capital Injection Fee, additional processing and verification charges, as well as directives on the placement of recapitalisation funds in an escrow account.
In a memo dated August sixth, the Ministry of Finance directed NAICOM to provide a detailed response and legal justification for the disputed charges.
The petitioners had challenged the one-percent Capital Injection Fee alongside processing and verification fees contained in NAICOM’s Minimum Capital Requirement Guidelines.
For NICON Insurance, the additional fees were put at 305 million naira, while Nigeria Reinsurance Corporation was assessed 375 million naira.
The companies also opposed NAICOM’s directive requiring existing insurance operators to transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria.
They argue that the requirement goes beyond the ten-percent statutory deposit prescribed under Section 16 Subsection 3 of the Nigeria Insurance Industry Reform Act 2025.
The two companies say they met the July 31 recapitalisation deadline, with NICON injecting 20 billion naira and Nigeria Re 30 billion naira into Mudaba Term Deposit Accounts with Lotus Bank.
They also said they had deposited 2-point-five billion naira with the CBN in line with the statutory requirement and made initial fee payments of 80 million and 75 million naira, respectively.
Pending determination of the petition, the Finance Ministry directed NAICOM to suspend enforcement of the contested processing fees, the one-percent Capital Injection Fee, and the full escrow-transfer requirement against the two companies.
NAICOM, however, maintains that the requirements were contained in guidelines issued since last year and says all 43 companies that have completed the recapitalisation exercise, as well as eight awaiting verification, have complied.
The dispute comes as the insurance industry undergoes a major recapitalisation exercise aimed at strengthening the capital base of operators.
The latest intervention now puts the regulatory fees and treatment of recapitalisation funds under closer scrutiny, as the Finance Ministry seeks NAICOM’s legal justification for the contested requirements.
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(Editor: Ebuwa Omo-Osagie)
