NAICOM Bars Insurance Firms With Unpaid Claims From Recapitalisation Re-Licensing

The National Insurance Commission on Tuesday issued a regulatory directive warning insurance companies with outstanding discharged claims that they would be denied re-licensing at the conclusion of the July 31, 2026 recapitalisation deadline, unless all such claims were fully settled and documented by July 21.

In a letter to all Managing Directors and CEOs of insurance companies, NAICOM said the directive was part of efforts to ensure that the recapitalisation exercise achieved its intended objectives of strengthening the financial capacity, resilience, and overall stability of the sector. It said an insurance company that strengthened its capital base while simultaneously failing to pay legitimate claims was not genuinely serving the public interest the exercise was designed to protect.

Insurers Must Submit Claim Settlement Evidence

Under the directive, all insurance companies were required to identify and reconcile all discharged claims currently outstanding in their records, settle all such claims to beneficiaries without further delay, and submit a report signed by their Managing Director and CEO, along with evidence of settlement, to NAICOM by July 21, 2026. NAICOM said compliance with the directive was a critical regulatory criterion for eligibility, confirmation, and re-licensing after the recapitalisation exercise concluded.

The insurance industry has long faced public criticism over delayed and disputed claims payments, with policyholders routinely reporting multi-year battles to receive settlements on legitimate life, motor, property, and health insurance claims. Consumer protection advocates said the NAICOM directive, if enforced strictly, could force meaningful improvement in claims payment culture across the industry.

Industry in Final Push Before Deadline

Furthermore, several insurance companies were in the final stages of their rights issues, mergers, and capital-raising exercises as the July 31 deadline approached. The NGX Insurance Index had underperformed all other major sectoral benchmarks in the first half of 2026, declining 7.7 per cent even as the broader market gained 47 per cent, reflecting investor concerns about the sector’s financial health. However, NAICOM said it was confident that the combination of recapitalisation and claims enforcement would restore public confidence in Nigeria’s insurance market. Consequently, the July 21 claims submission deadline sets up a decisive accountability moment for the sector.