Insurance companies seeking to retain their operating licences after the ongoing recapitalisation exercise must first clear every verified outstanding claim owed to policyholders, the National Insurance Commission (NAICOM) has directed, raising the stakes for operators racing to meet the statutory July 31 deadline.
The directive, contained in a circular issued to managing directors and chief executives of insurance firms, makes settlement of all discharged claims a compulsory condition for regulatory clearance and eventual re-licensing. The commission also ordered insurers to submit evidence of payment alongside reconciled claims records by July 21.
The move marks one of NAICOM’s strongest regulatory interventions since the Nigerian Insurance Industry Reform Act (NIIRA) 2025 introduced a fresh capital regime designed to strengthen insurers’ financial capacity and improve public confidence in the sector. The commission has consistently maintained that the July 31 recapitalisation deadline will not be extended.
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In the directive titled “Regulatory Directive – Settlement of Discharged Claims as a Precondition for Re-Licensing Pursuant to the Ongoing Recapitalisation Exercise,” NAICOM said insurers must “fully settle all outstanding duly discharged claims”. It described compliance as “a mandatory precondition” for certification under the recapitalisation programme.
The regulator further directed companies to identify and reconcile all unpaid discharged claims in their books before forwarding evidence of settlement to the commission on or before July 21.
It emphasised that failure to comply would affect eligibility for confirmation and re-licensing after the recapitalisation exercise concludes.
The directive was issued barely four months after Commissioner for Insurance, Olusegun Omosehin, reiterated that the July 31 recapitalisation deadline was “sacrosanct” and could not be shifted because it is backed by law under NIIRA 2025 rather than administrative discretion. At the time, he disclosed that while several insurers had begun verification of their recapitalisation efforts, none had yet fully crossed the regulatory threshold.
The directive suggests that NAICOM wants the recapitalisation exercise to measure more than financial capacity. It also places emphasis on insurers’ record of honouring approved claims which makes payment of outstanding discharged claims a vital test of regulatory compliance before licences are renewed.
Delayed payment of legitimate claims has remained a recurring source of public distrust in Nigeria’s insurance market, often discouraging individuals and businesses from purchasing insurance products despite repeated awareness campaigns.
Under the recapitalisation framework introduced after the enactment of NIIRA 2025, life insurers are expected to maintain a minimum capital base of ₦10 billion, non-life insurers ₦15 billion, while reinsurers must meet ₦35 billion. The reform seeks to produce stronger institutions capable of underwriting larger risks and improving consumer protection.
By making claims settlement a regulatory hurdle alongside capital adequacy, NAICOM has effectively signalled that financial strength alone will no longer guarantee continued operation as insurers must also demonstrate compliance with obligations owed to policyholders before their licenses are renewed.
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