Recapitalisation: NAICOM warns insurers on disclosure, capital shortfalls

The Nationwide Insurance coverage Fee has flagged weak monetary disclosures, solvency gaps and deficiencies in recapitalisation planning by some insurance coverage corporations, warning that the continued recapitalisation train leaves little room for repeated errors or delays in regulatory approvals.

The considerations had been raised at a one-day stakeholders’ session collectively organised by the Nigerian Insurers Affiliation and NAICOM for the insurance coverage business on the NEM Insurance coverage auditorium in Lagos.

The PidomNigeria reviews that the session introduced collectively finance, audit and compliance officers of insurance coverage corporations, exterior auditors, actuaries and business consultants.

In his welcome tackle, the Chairman of the Accounting Technical Committee of the NIA, Dr Emmanuel Otitolaiye, mentioned the engagement was necessitated by points recognized throughout NAICOM’s evaluation of insurers’ 2024 audited monetary statements. In accordance with him, the target of the session was for insurers to tackle board the educational factors and incorporate them into their 2025 monetary statements to scale back the quantity of regulatory queries and allow sooner approvals.

He mentioned, “The significance of this programme can’t be overemphasised, because it offers a chance for us to be taught straight from NAICOM primarily based on the evaluation of the 2024 monetary statements submitted by the business.

A number of points had been recognized in the course of the evaluation, and in view of the collaborative relationship between NAICOM and the business, the Fee shouldn’t be primarily targeted on penalising operators however fairly on working with the business to deal with the recognized studying factors. That is the rationale behind the organisation of this programme in January.

“The target is for all stakeholders to tackle board these studying factors and incorporate them into the 2025 monetary statements in order that by the point accounts are submitted to NAICOM, there might be fewer points to deal with, and approvals might be granted extra expeditiously. It’s also essential to notice that it is a yr of recapitalisation, with vital work and engagement ongoing in that regard. Consequently, this isn’t a yr wherein monetary statements can afford to be returned repeatedly for correction. The luxurious of time is restricted, not just for NAICOM but in addition for the business, given the quite a few actions scheduled all year long.”

The Director-Common of the Nigerian Insurers Affiliation, Bola Odukale, mentioned the annual programme had continued to strengthen collaboration between member corporations and the regulator, including that deeper engagement was within the general curiosity of the insurance coverage business.

The Director of Supervision at NAICOM, Mrs Oluwatoyin Charles, mentioned the fee was dedicated to offering an enabling setting for a powerful and steady insurance coverage business, notably amid sweeping regulatory adjustments launched underneath the Nigerian Insurance coverage Trade Reform Act 2025.

Charles mentioned, “As we collect at this time, our discussions tackle even higher significance given the continued transformations in our regulatory setting, notably the recapitalisation train launched underneath the NIIRA 2025. This reform represents a pivotal milestone for our business, one designed to strengthen solvency, improve risk-bearing capability, and place Nigerian insurance coverage establishments for sustainable progress and elevated public confidence.

“We recognise that many organisations are already taking daring steps towards assembly the brand new capital thresholds and structuring their inside processes to make sure well timed compliance. Our degree of readiness as an business displays a collective willpower to not solely meet regulatory necessities but in addition to embrace this transition as a chance for modernisation, improved governance, and higher operational resilience.”

Mrs Charles additionally urged insurers to enhance accuracy and transparency in monetary reporting underneath IFRS 17 Insurance coverage Contracts, stressing that weak disclosures undermine confidence and delay regulatory processes. She famous that monetary integrity was elementary to constructing belief and safeguarding the way forward for the business.

“Monetary integrity shouldn’t be merely a typical; it’s a promise. A promise that each quantity tells the reality, each report earns belief, and each determination protects the longer term. This quote resonates deeply with every of us, CFOs, auditors, and actuaries, as a result of we collectively type the spine of economic accountability in our sector. Your roles, although distinct, are interwoven by a shared duty: making certain that monetary reporting is correct, clear, and aligned with each native and international expectations.”

Offering highlights of the recurring errors within the insurers’ monetary statements, the Senior Monetary Analyst within the Workplace of the Deputy Commissioner (Technical) at NAICOM, Mr Gabriel Oloba, listed weaknesses in disclosures and reconciliation processes inside the notes to the accounts, noting that such shortcomings often decelerate regulatory evaluation and approval.

Oloba suggested insurers to give attention to accuracy, consistency and full compliance with reporting requirements, including that improved monetary reporting would assist a smoother evaluation course of and faster regulatory clearance. He additionally urged corporations to completely disclose info referring to the brand new capital regime in step with current rules, together with Minimal Capital Requirement, Threat-Based mostly Capital, Capital Adequacy and the Solvency Management and Intervention Framework.