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A former Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mohamed Kari, has urged the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, to ignore calls for regulatory concessions following the recently concluded insurance industry recapitalisation exercise in the country.
This development was confirmed to Daily Sun by NAICOM.
Kari said the call was critical, especially as the companies clamouring for such concessions were chronic defaulters whose failure or strict regulatory discipline would pose no systemic risk to the Nigerian financial system or the broader economy.
NAICOM had earlier directed insurance companies, as part of the recapitalisation process, to transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN), a move being challenged in court by NICON Insurance and Nigeria Reinsurance Corporation.
NICON and Nigeria Re, in a petition dated 27 July 2026, challenged what they described as unlawful fees and regulatory demands arising from the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The firms, through their lawyers, also wrote to the Federal Ministry of Finance, requesting that it direct NAICOM to suspend its demand that both companies transfer their entire recapitalisation funds into an escrow account with the CBN pending the determination of their petition challenging the legality of the charges and directive.
Commenting on the matter, Kari, who is also a former Managing Director and Chief Executive Officer of NICON Insurance and Nigeria Re, said it is globally accepted that governments may occasionally intervene to rescue or support a significant player in the financial sector where its distress poses a genuine “too big to fail” systemic risk capable of triggering a wider economic crisis.
Kari, who is the current Wazirin Bauchi, said: “However, one must examine the reality of the two institutions in question today. These are no longer the market giants they once were decades ago. Having suffered years of steep decline, loss of market share, and severe operational shrinkage, their current market footprint is virtually insignificant.
“Their failure or strict regulatory discipline poses absolutely zero systemic risk to the Nigerian financial system or the broader economy.
“Why then should government intervene to shield operators whose distress carries no systemic consequence whatsoever? Rescuing or granting regulatory concessions to insignificant, chronic defaulters cannot be justified under any sound macroeconomic policy.”
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He noted that when political intervention is used to shield such non-systemic entities from standard regulatory checks, the equilibrium of the market is distorted, creating unfair advantages.
According to him, operators that meet compliance targets bear the full cost of regulatory compliance, while non-compliant firms that secure political exemptions operate with an artificial cost advantage.
“It disincentivises real capacity building. When political lobbying becomes an alternative to recapitalisation, companies are discouraged from making the hard structural choices necessary to strengthen their balance sheets and operations.”
According to Kari, granting such concessions would distort investor confidence, as both domestic and international investors seek predictable and transparent operating environments.
“A playing field where rules can be bent for select players frightens away patient capital. It weakens policyholder protection.”
He stressed that regulatory standards exist primarily to guarantee that claims are paid promptly when disasters occur, adding that shielding insolvent entities directly exposes policyholders to unmitigated risk.
Advising the minister, he noted that Nigeria’s insurance sector has enormous untapped potential, but can only realise that potential if the government allows a level playing field to flourish.
“The Federal Government must resist the urge to grant special carve-outs or act as an informal court of appeal for failing operators. NAICOM is the state’s empowered regulator; it must be permitted to apply the law equally to every company, whether privately owned, historically state-created, or under asset management control.
“I trust that it is through this uncompromising stance that the Federal Ministry of Finance, which bears the ultimate responsibility for managing Nigeria’s economy, will give the right impression to investors, insurers and reinsurers the world over.
“By upholding regulatory integrity and refusing to shield non-compliant operators, your Ministry will demonstrate that Nigeria is serious about financial discipline, thereby building lasting global confidence in the Nigerian insurance sector,” Kari stressed in his open letter to the Minister of Finance.
