LAGOS:  About N300 billion raised by Nigerian insurance companies during the recently concluded recapitalisation exercise remains locked in the Central Bank of Nigeria (CBN), as affected firms undergo verification processes over concerns about possible illicit sources of some investments.

The delay has left insurance operators struggling to access fresh capital intended to strengthen their financial positions, improve business performance and deliver returns to investors.

The development comes despite the reported approval by the National Insurance Commission (NAICOM) for the release of the funds, with insurance companies still working to satisfy the CBN’s requirements.

Speaking during a virtual press briefing on the outcome of the Insurers Committee meeting, the Chairman of the Nigerian Insurers Association (NIA), Ebelechukwu Nwachukwu, said the industry regulator had completed its part of the process, while operators were addressing the apex bank’s conditions.

According to her, insurance companies are working to meet the CBN’s criteria to gain access to the funds before the end of October 2026.

The verification process reportedly followed concerns over the possible illicit origins of some investments made during the recapitalisation programme, prompting stricter scrutiny of the capital raised by participating firms.

A total of 24 insurance companies reportedly raised approximately N300 billion in fresh capital during the recapitalisation exercise, while 26 other firms had already met the revised minimum capital requirements without raising additional funds.

The fresh capital, combined with more than N700 billion in existing industry capital, brought the sector’s post-recapitalisation capital to approximately N1.079 trillion.

The insurance companies had reportedly planned to deploy the funds in the third quarter of 2026 to strengthen their financial performance and reward investors with dividends in recognition of their support for the capital-raising exercise.

However, the continued restriction on access to the funds has complicated those plans.

The recapitalisation programme was introduced under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which required participating insurers and reinsurers to meet higher minimum capital thresholds.

Under the revised requirements, life insurance companies were mandated to increase their minimum capital from N2 billion to N10 billion, while non-life insurers were required to move from N3 billion to N15 billion.

Reinsurance companies were also required to raise their minimum capital from N10 billion to N35 billion.

The recapitalisation exercise ended on July 31, 2026, with participating firms required to keep their recapitalised funds in escrow accounts with the CBN.

The Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, had earlier disclosed that the industry’s capital base had increased to N1.079 trillion from approximately N700 billion before the exercise.

Omosehin said the commission was working towards allowing insurance operators to access their recapitalisation funds, while pledging regulatory oversight to ensure the money is used for its intended purposes.

He stressed the need to prevent the funds from being mismanaged or diverted into unrelated investments.

The release of the trapped capital is expected to be significant for insurance companies seeking to expand operations, improve their capacity to underwrite risks and strengthen confidence among investors and policyholders.

However, the affected firms must first satisfy the CBN’s verification requirements before gaining access to the funds.