Insurance recapitalisation:  Oyedele queries NAICOM over processing fee, payment into escrow account

By Emma Ujah, Abuja Bureau Chief

The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, has queried the National Insurance Commission (NAICOM) over its imposition of a 1% Capital Injection Fee, alongside verification fees to be paid by insurance companies in the ongoing sector recapitalization exercise.

The query followed a petition by NICON Insurance Limited and Nigeria Reinsurance Corporation in which the two companies accused NAICOM of imposing fees on the insurance companies, beyond statutory provisions.

A memo referenced: F/LEG/0608/2026/22, dated August 6, and signed by the Permanent Secretary (Finance) of the Ministry of finance, Mr. Raymond Omachi, for the Minister, directed the Commission to provide “detailed response and legal justification to the issues raised”.   

In addition the Commission was also directed to transfer entire capital injection funds into the CBN escrow account and to suspend the enforcement of the contested Processing Fees, 1% Capital Injection Fee, and full capital escrow account transfer directives against NICON and Nigeria Re, pending the determination of the petition.

Issues raised by the petitioners against NAICOM were: the assessment and demand for 1% Capital Injection Fee, alongside additional Processing and Verification Fees as contained in the commission’s Minimum Capital Requirement Guidelines amounting to N305 million for NICON and N375 million for Nigeria Re.  

The two companies also opposed the directives of the Commission requiring existing operational insurance entities to transfer their entire capital injections funds into an escrow account at the Central Bank of Nigeria as against the 10 percent statutory deposit requirement prescribed under Section 16 (3) of the Nigeria Insurance Industry Reform Act (NIIRA) 2025.

They contend that they have complied with the statutory deadline of July 31, 2026 by injection of N20 billion and N30 billion, respectively, into Mudaba Term Deposit Accounts with Lotus Bank Ltd, exceeding their adjusted requirements of N16 billion and N28 billion.

Both companies claimed to have deposited N2. 5 billion with the CBN pursuant to Section 16 (3) of NIIRA 2025 and had made initial fee payments of N80 million and N75 million.   

However, the commission said yesterday, “All these are requirements released since last year in the Guidelines which all the recapitalised 43 companies and the 8 awaiting verification have complied with.”