NAICOM mandates 3 billion Naira minimum capital for microinsurance firms under new reform act

NAICOM phases out tiered microinsurance capital in favor of a 3 billion Naira uniform requirement under the 2025 Nigeria Insurance Industry Act.

By: AXL Media

Published: Apr 6, 2026, 3:46 AM EDT

Source: Information for this report was sourced from THISDAY

Transitioning to a Uniform Capital Structure

In a major regulatory overhaul, NAICOM is transitioning microinsurance operations away from its legacy tiered system. Previously, firms were categorized into Unit (40 million Naira), State (100 million Naira), and National (600 million Naira) operators. Under the new Nigeria Insurance Industry Act (NIIRA) 2025, the commission is expected to settle on a uniformed minimum capital base of 3 billion Naira. This change aims to ensure that micro-underwriters possess the necessary financial resilience to manage risks associated with nationwide coverage and large-scale financial inclusion.

Strategic Alignment with National Reform

This capital hike follows the broader industry recapitalization which set minimums of 10 billion Naira for Life, 15 billion Naira for General, and 35 billion Naira for Reinsurance firms. By mandating a 3 billion Naira base for microinsurance, the Act positions these specialized firms as vital components of the national financial infrastructure. The reform is specifically designed to widen market penetration and provide a protective buffer for the small-scale, high-volume policies typical of the micro-sector.

Target Demographics and Product Design

The primary target market for these firms remains low-income individuals, micro-entrepreneurs, and rural communities often excluded from traditional insurance. According to the new guidelines, products must be "low-value and easy-to-understand," featuring simplified terms tailored to the specific needs of the underserved. The Act mandates that policies are affordable while ensuring that the claims process is accessible and transparent for populations with limited formal financial experience.