The National Insurance Commission has assured policyholders that the Policyholders’ Protection Fund will cover any shortfall in claims owed by six insurance companies whose licences were withdrawn after they failed to meet the recapitalisation requirements.
The Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, gave the assurance on Thursday at an interactive session with insurance journalists in Lagos.
The regulator recently relicensed 48 insurers and two reinsurers at the end of the recapitalisation exercise, while withdrawing the licences of Nicon Insurance, Nigeria Reinsurance Corporation, Goldlink Insurance, Staco Insurance, Royal Exchange Prudential Insurance and Universal Insurance.
The general insurance licences of the Nigerian Agricultural Insurance Corporation were also withdrawn for failing to meet the requirements. However, NAIC will continue to underwrite agricultural insurance in line with its original mandate.
Omosehin said the withdrawal of an insurer’s licence did not automatically mean that policyholders would lose their claims.
He explained that the assets of the affected companies would first be realised and used to settle policyholders’ liabilities before the PPF would be considered.
“As of today, the licences of six companies have been withdrawn. It is difficult to predict the outcome of the liquidation process because most of these entities have assets,” he said.
According to him, the protection fund would not be required if the assets realised during liquidation were sufficient to settle claims.
“For instance, if the total amount owed to policyholders is N2 billion and the assets realised are N3 billion, policyholders will be paid first. Other creditors will be settled from the balance. The PPF will not be involved,” Omosehin explained.
He added that the fund would be activated where the proceeds from liquidation could not fully meet policyholders’ liabilities.
“If the assets realised are not sufficient to meet policyholders’ liabilities, we will then draw from the PPF to cover the shortfall,” he said.
The commissioner noted that the PPF was still developing but had commenced operations with the mandate of protecting customers against losses arising from the failure of insurance companies.
He said it was too early to determine whether the fund’s current capacity would be sufficient to cover potential claims from the six companies.
“Whether the current capacity of the fund will be sufficient will depend on the final outcome of the liquidation exercise,” he said.
Omosehin said NAICOM’s priority remained the protection of policyholders, adding that the Nigerian Insurance and Reinsurance Act 2025 provides a framework for managing such situations.
The recapitalisation exercise saw 48 insurers and two reinsurers raise a combined N1.079 trillion in capital.
With the exercise concluded, industry stakeholders expect greater attention to claims settlement, risk-based supervision and market conduct as regulators work to strengthen confidence in the insurance sector.
