The National Insurance Commission (NAICOM) has declared that insurance companies with unresolved claims owed to policyholders will not be granted new operating licences under the ongoing recapitalisation programme.
The Commission said the recapitalisation exercise is not only aimed at strengthening the financial capacity of insurance firms but also at ensuring that companies meet their obligations to customers before continuing operations.
According to NAICOM, insurance companies must demonstrate that they have settled genuine outstanding claims and complied with regulatory requirements before they can be considered for relicensing. The regulator stressed that protecting policyholders remains a top priority and that firms failing to honour valid claims would face strict regulatory action.
The Commission noted that the exercise is designed to improve confidence in Nigeria’s insurance industry by ensuring that only financially sound and responsible operators remain in the market. It explained that increasing capital alone is not enough, as insurers must also show strong corporate governance, effective risk management and a commitment to customer service.
NAICOM said the recapitalisation programme is expected to produce a stronger and more resilient insurance sector capable of supporting economic growth and attracting greater investment. It added that companies seeking to continue operating must satisfy all prudential and market conduct requirements, including prompt settlement of claims.
The regulator urged insurance companies to use the recapitalisation period to strengthen their balance sheets, improve operational efficiency and restore public trust. It also encouraged policyholders to report any unresolved claims through the appropriate regulatory channels.
Industry stakeholders believe the Commission’s position will encourage insurers to clear outstanding obligations while improving accountability across the sector. They also expect the policy to promote healthier competition by ensuring that only financially stable and customer-focused companies remain licensed to operate.
The ongoing recapitalisation exercise is regarded as one of the most significant reforms in Nigeria’s insurance industry in recent years. Analysts say the initiative has the potential to create stronger insurance firms with greater underwriting capacity, improved claims settlement records and the financial strength to support large-scale investments and national development projects.
With its latest directive, NAICOM has made it clear that meeting capital requirements alone will not guarantee a licence renewal. Insurance companies must also demonstrate integrity, financial discipline and a proven commitment to fulfilling their obligations to policyholders before they can continue doing business in Nigeria.
SOURCE: VANGUARD
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