The Honourable Minister of Finance & Co-ordinating Minister of the Economy
Federal Ministry of Finance
Abuja, Nigeria
By Alh. Mohamed Kari (Wazirin Bauchi)
Enforcing a level playing field in the Nigerian Insurance Industry and supporting Statutory regulatory mandates
Dear Honourable Minister,
I write this as an open letter to you, deliberately choosing a public medium in the interest of total transparency. The matters surrounding regulatory compliance, market capitalisation, and financial stability in the Nigerian insurance sector affect not just a few boardroom executives, but the entire economic architecture of our nation. By placing these arguments in the public domain, it is my intention to ensure that National Insurance Commission (NAICOM) as the statutory regulator, the broad community of insurance operators, international reinsurers, and most importantly, the insuring public are fully aware of the principles at stake. Transparency is the bedrock of market discipline, and public scrutiny remains the best antidote to regulatory compromise.
I have had the unique privilege of serving as Managing Director of Nigeria Reinsurance Corporation (Nigeria Re.), Managing Director of NICON Insurance (NICON) and subsequently as the Commissioner for Insurance and Chief Executive of NAICOM. Having sat on both sides of the table; first leading these two flagship institutions and later regulating the entire sector; I possess a unique, deep, and unbiased vantage point on the structural mechanics of Nigerian insurance. It is precisely because of this singular background, free from commercial bias or political expedience, that I feel duty-bound as a deeply concerned stakeholder to address you directly on what the Insurance industry needs most: a truly level playing field.
If Nigeria is to refine and strengthen its insurance sector to compete globally, it needs more than just passing a piece of legislation, the market must operate under fair, transparent, and equal rules for every player. Regrettably, the current landscape is being distorted once more by a troubling and re-occurring pattern. As NAICOM enforces critical statutory reforms to strengthen the industry’s financial bedrock, NICON and Nigeria Re have once again approached your Ministry seeking political intervention to bypass regulatory requirements.
This resort to executive lobbying creates an uneven playing field. It penalises law-abiding operators while granting preferential exceptions to legacy institutions that have failed to adapt.
From pillars of capacity to a divided playing field
To understand why a fair market structure is essential, one must look at how these entities began. Established by the Federal Government in 1969 and 1977 respectively, NICON and Nigeria Re were created as the bedrock for domestic capacity. They were mandated to retain premium capital within Nigeria, underwrite public assets, build local expertise, and cushion the economy against systemic risk, which they did effectively.
Indeed, virtually most of the first, second, and third generations of insurance practitioners in Nigeria and to a large extent West Africa, either worked in these pioneer organisations or were directly trained by them. They served as the premier institutions of excellence and professional development for the entire industry. It is precisely because of this glorious legacy that it pains the industry so deeply today to watch these same organisations continue to retard the progress of the Nigerian Insurance industry.
Following the privatisation exercise of the mid-2000s, this proud heritage was severely eroded. Transferred under controversial circumstances to core investors associated with weak governance and excessive leverage, both entities gradually lost their market leadership. Over time, persistent governance failures, balance-sheet overhangs and unpaid claims fractured their operations, which required intervention at various intervals by NAICOM and Asset Management Corporation of Nigeria (AMCON),
Rather than allowing the market to refine itself through equal competition, legacy status has repeatedly been used as a shield against the very standards required of everyone else.
Equal rules for a maturing industry
Building a self-reliant, highly capitalised Nigerian insurance market requires consistent standards. Under the Nigerian Insurance Industry Reform Act (NIIRA) 2025 and NAICOM’s Minimum Capital Requirement Guidelines, the regulator established a framework to ensure all operators hold genuine financial backing to protect policyholders.
The central issue here is not whether statutory requirements feel inconvenient or demanding to any individual operator; financial regulations, by their very nature, impose rigorous demands. The fundamental question is simply this: are the rules applicable to everybody?
In a healthy market, the answer must be an unequivocal yes. The response from the broader industry demonstrates that compliance is achievable. Over 90% of operators have diligently followed the statutory process raising fresh capital, depositing required reserves in the Central Bank on Nigeria (CBN), undergoing verification, and settling regulatory fees, as required by the law. These institutions did not seek special exemptions; they invested heavy resources to comply with the law and earn their place in a modern financial sector.
In contrast, NICON and Nigeria Re continue to seek special dispensation through political channels, petitioning your Ministry to suspend regulatory directives, capital checks, and escrow requirements. When compliance is treated as mandatory for 90% of the market but optional for a selective few, the concept of statutory regulation collapses into favouritism. Allowing a handful of operators to play by a separate set of rules undermines the principles of fair competition and discourages the very investment needed to refine the market.
What obtains in other sectors: The precedent of regulatory discipline
Honourable Minister, one must ask a fundamental question: where else in Nigeria’s financial ecosystem does this happen? At no time do we witness such unhealthy behaviour in other regulated sub-sectors. When the CBN or the Pension Commission (PENCOM) announces recapitalisation deadlines or statutory capital increases for their regulated entities, we never see their executives running to the Federal Ministry of Finance to lodge complaints or seek political interventions to weaken the regulator’s hand. Those operators understand that financial discipline is non-negotiable and that statutory requirements are enforced by the regulatory authority established by law, not negotiated through political patronage. Those models are best for financial regulation.
Why then should insurance operators treat regulatory compliance as a matter open to political lobbying? Why should the Ministry of Finance be patronised to intervene in pure regulatory enforcement? Allowing insurance companies to treat the Ministry as an informal court of appeal against NAICOM degrades the stature of Commission, promotes regulatory arbitrage, and projects an image of an industry that refuses to mature. This is one reason why I felt in the Insurance industry had been short-changed, by giving the Ministry a regulatory role in the previous insurance laws.
Honourable Minister, the NIIRA 2025 has provided very clearly in Section 8(6) & (9) the procedure to follows if an operator’s license is cancelled, and no mention of the Ministry of Finance is made, so why should the Ministry breach the law of the Federal Republic by entertaining such overture and even overruling the regulator?
Why executive intervention harms fair competition
Honourable Minister, despite the section referred to above, it is globally accepted that a government may occasionally intervene to rescue or support a consequential player in the financial sector, strictly where its distress poses a genuine “too big to fail” systemic risk whose collapse would trigger a wider economic catastrophe.
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.
When political intervention steps in to shield such non-systemic entities from standard regulatory checks, the equilibrium of the market breaks down:
It creates unfair advantage: Operators that meet compliance targets, carry the full cost of regulatory fidelity, 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 refine their balance sheets and operations.
It distorts investor confidence: Both domestic and international investors look for predictable, transparent environments. A playing field where rules can be bent for select players frightens away patient capital.
It weakens policyholder protection: Regulatory standards exist primarily to guarantee that when disaster strikes, claims are paid promptly. Shielding insolvent entities directly exposes policyholders to unmitigated risk.
The path forward: Restoring global confidence
Honourable Minister, Nigeria’s insurance sector has enormous untapped potential, but it 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.
Please accept this as a plea from many that can not voice their frustrations.
Yours sincerely,
Alh. Mohamed Kari (Wazirin Bauchi)
Former Managing Director, Nigeria Re,
Former Managing Director, NICON,
Former Commissioner for Insurance / CEO, NAICOM
