Business
Insurance firms’ N300b stuck at CBN over verification for illicit funds
By Rosemary Iwunze
Insurance companies are now struggling to have access to the new capital they raised, amounting to about N300 billion under the just concluded recapitalization programme.
The funds were held in the Central Bank of Nigeria, CBN, pending verifications for illicit funds inflows.
Vanguard learnt that following suspicion of possible illicit sources of some of the new investments in the firms the apex imposed stricter capital verification regime, a development which has proved tough for most of the insurance firms to scale through.
It is further learnt that while the National Insurance Commission, NAICOM, has given approval for the apex bank to release the funds to the insurers, the affected firms are painstakingly going through the processes.
Speaking to journalist during the virtual press briefing on the outcome of the Insurers Committee meeting, Chairman of Nigeria Insurers Association, NIA, Mrs. Ebelechukwu Nwachukwu, stated that, the insurance sector regulator has done its part while operators are currently working on the CBN criteria to access the funds on or before the end of this month.
The insurers said they had planned to deploy the new capital in the third quarter of this year to boost their financial performance in 2026 while rewarding their investors with good returns in dividend for their support in the recapitalization program.
Recall that the 24 insurance companies had cumulatively raised N300 billion during the exercise, added to over N700 billion existing capital, taking the total industry capital to N1.079 trillion, post recapitalisation.
The Nigerian Insurance Industry Reform Act (NIIRA), 2025, had stipulated that the underwriting firms and reinsurers who participated in the recapitalisation exercise that ended on July 31st, 2026 must keep their recapitalised funds in an escrow account with CBN.
Of the 50 firms that scaled through the recapitalisation hurdle, 24 of them raised fresh capital while 26 of them had earlier surpassed the minimum capital benchmark.
NIIRA had mandated life underwriters to recapitalise from N2billion to N10billion, non-life from N3billion to N15billion while reinsurers were required to upgrade from N10billion to N35billion.
The Commissioner for Insurance/CEO, NAICOM, Mr. Olusegun Omosehin, had earlier disclosed that the capital in the market has now risen to N1.079trillion, up from about N700billion before the exercise.
According to him, NAICOM now wants to allow operators access the recapitalisation funds, he promised that the regulator would monitor the operators to ensure that the funds fulfill its purpose and not mismanaged or divested into something else.
