The National Insurance Commission, NAICOM, Nigeria’s insurance regulatory body, has revoked the operational licence of the National Insurance Corporation of Nigeria, NICON.
NICON, Nigeria’s biggest insurance company, was established in 1969 by Decree 2 and owned by the federal government.
NAICOM revoked NICON’s operational licence marked RIC – 049, after the company’s repeated failure to meet prescribed regulatory requirements.
Following the company’s operational licence revocation, NAICOM appointed a Senior Advocate of Nigeria, SAN, Chukwuma-Machukwu Ume, as Receiver and Provisional Liquidator of NICON.
Notice to policyholders, creditors, other stakeholders
After taking over, the Receiver Manager and Provisional Liquidator issued a public notice to policyholders, creditors, business partners, federal and state governments, the FCT and land registries to protect the properties of the struggling firm,
The notification warned that transactions, contracts, commitments or other dealings purportedly undertaken on behalf of NICON, being In-Liquidation, would not be honoured without the ratification of the Receiver and Liquidator.
The development effectively transferred the management of the company’s affairs and portfolio to the appointed Receiver and Provisional Liquidator, who is mandated to secure the company’s assets, establish its liabilities and oversee the process of winding up its operations in accordance with the law.
NAICOM’s revocation of NICON’s licence is not unconnected to the Nigerian Insurance Industry Reform Act (NIIRA) 2025, as the regulator enforces new capital requirements.
The commission had vowed to withdraw the operational licence of insurance operators who failed to meet the new minimum capital requirements within the stipulated recapitalisation period.
NICON Insurance was among operators that failed to meet the prescribed requirements within the stipulated deadline, resulting in the cancellation of its licence.
The tasks before the Receiver Manager
With the appointment of the Receiver Manager and Provisional Liquidator, the focus is currently on taking control of the company’s assets and records, identifying legitimate liabilities and ensuring that the winding-up process is conducted in an orderly manner.
The Receiver is also expected to collaborate with NAICOM on matters arising from the liquidation and submit periodic reports on the progress of the process.
The development placed the interests of policy-holders, creditors and other stakeholders at the centre of the liquidation exercise, particularly the verification and settlement of legitimate claims and liabilities.
The appointment of a Receiver/Provisional Liquidator is considered in the insurance industry as a significant regulatory intervention as it removes the management of the affected company from the normal course of business and places its affairs under the control of an officer charged with preserving and realising its assets for the purpose of settling lawful obligations.
The move is also to prevent unauthorised dealings with the company’s assets and ensure that transactions undertaken during the liquidation process are properly controlled.
NAICOM maintained in a statement that the enforcement of the recapitalisation requirements is aimed at strengthening the financial capacity of the insurance industry and ensuring that only adequately capitalised operators remain in business.
The regulator recently announced that 43 reinsurance companies had successfully met the new minimum capital requirements at the end of the recapitalisation exercise.
