News & Events

MAY 2019 NEWS OGHOGHO MAKINDE, UNEKUOJO IDACHABA AND JESUTOFUNMI OLABENJO

The National Insurance Commission (“NAICOM”) on May 20, 2019 published Circular No: NAICOM/DPR/CIR/25/2019 (“the Circular”), on the review of the minimum paid up capital for insurance and reinsurance companies. The Circular applies to all insurance and reinsurance companies except Takaful [see below] operators and micro-insurance companies.

The minimum paid up share capital requirement for life insurance, general insurance, composite insurance and reinsurance have been revised by approximately 200% as follows:

  • Life insurance business:  upward review from ₦2,000,000,000 (Two Billion Naira) to ₦8,000,000,000 (Eight Billion Naira).
  • General insurance business: upward review from ₦3,000,000,000 (Three Billion Naira) to ₦10,000,000,000 (Ten Billion Naira).
  • Composite insurance business: upward review from ₦5,000,000,000 (Five Billion Naira) to ₦18,000,000,000 (Eighteen Billion Naira)
  • Reinsurance business: upward review from ₦10,000,000,000 (Ten Billion Naira) to ₦20,000,000,000 (Twenty Billion Naira).

The revised minimum paid-up share capital requirements take immediate effect for new applications while existing insurance and reinsurance companies are required to comply no later than June 30, 2020.

Furthermore, the statutory deposit requirement in Section 10 of the Insurance Act 2003 requiring an insurer intending to commence insurance business in Nigeria to deposit 50% of its paid-up capital with the Central Bank of Nigeria applies from the commencement date of the Circular.

Takaful insurance is a Sharia’ah compliant insurance system that incorporates elements of mutuality and ethical finance considerations and is open to all people regardless of faith and background. The NAICOM approved Takaful Guidelines can be found here.