Disputed Escrow Accounts and Lotus Bank Deposits
NICON Insurance Limited and Nigeria Reinsurance Corporation are locked in a legal battle with the National Insurance Commission (NAICOM) after being excluded from the list of 43 recapitalised operators. The two companies, linked to businessman Jimoh Ibrahim, had their operating licences cancelled following the conclusion of the 12-month recapitalisation exercise.
NICON and Nigeria Re petitioned the Federal Government over NAICOM's implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025. They challenged the 1% capital injection fee, processing charges, and the directive to transfer funds to a Central Bank of Nigeria (CBN) escrow account.
The companies argued this directive violates Section 16(3) of NIIRA 2025, which requires a 10% statutory deposit with the CBN. They maintained they met the July 31, 2026 deadline by injecting N20 billion into NICON and N30 billion into Nigeria Re via Mudaraba Term Deposit accounts at Lotus Bank Limited.
These amounts exceeded their adjusted requirements of N16 billion and N28 billion. They also deposited N2.5 billion and N3.5 billion with the CBN. However, NAICOM disputed these claims, questioning why the companies refused to transfer the funds to the CBN escrow account if the money was available.
Senate Debate Over Capital Thresholds
The roots of the dispute trace back to legislative debates. During a Senate plenary session in December 2024, Jimoh Ibrahim argued against raising the minimum capital requirement for reinsurers to N35 billion.
Ibrahim warned that the increase from N20 billion to N45 billion in the initial proposal would weaken indigenous capacity and force firms out of Nigeria. He proposed keeping the N20 billion threshold.
Senator Mukhail Adetokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, defended the N35 billion compromise. Ibrahim's motion failed to get a seconder and was ruled out.
Licence Revocation and Liquidation
Under the final NIIRA 2025 framework, non-life insurers must maintain N15 billion, life insurers N10 billion, composite insurers N25 billion, and reinsurers N35 billion.
Following the July 31, 2026 deadline, NAICOM revoked Nigeria Re's operating licence and froze its bank accounts. The commission appointed Dr Muiz Banire (SAN) as Receiver and Provisional Liquidator to oversee the winding up of Nigeria Re.
