The Association of Securities Dealing Houses of Nigeria (ASHON) has appealed for an immediate review of the decision by the National Insurance Commission (NAICOM) to revoke Universal Insurance Plc’s operating licence.
ASHON, the umbrella body of stockbroking firms registered with the Securities and Exchange Commission (SEC), said the review would protect investors and boost confidence in the Nigerian capital market.
The association made the call in a position paper on Thursday signed by its Chairman, Mr Sehinde Adenagbe, on the revocation of Universal Insurance’s licence and the need for coordinated regulatory action.
The association stated its support for effective regulation and recapitalisation in the financial sector, while raising concern that certain regulatory processes could lead to value destruction, investor uncertainty and a loss of confidence in listed companies.
According to the association, Universal Insurance disclosed on Aug. 14 that it had entered into a binding investment agreement with FPNG Co-Nvest Ltd. for an equity investment of about N7.128 billion through a private placement.
It said the transaction, upon completion, would give FPNG a 50.1 per cent majority stake in the insurance company.
ASHON said Universal Insurance also disclosed that its board and shareholders had approved the transaction and that it was engaging NAICOM and other regulators to complete the recapitalisation process.
It, however, noted that the cancellation of the insurer’s registration took effect on Aug. 14, based on a NAICOM notice dated Aug. 13, after which a receiver/provisional liquidator was appointed.
The association described the timing of the two developments as raising fundamental questions about regulatory coordination, market integrity and investor protection.
“Where a listed company is publicly pursuing a binding capital injection capable, subject to regulatory approval and completion, of addressing its capital shortfall, there should be a coordinated process that protects the interests of the investing public,” it said.
ASHON urged NAICOM, the Federal Ministry of Finance and SEC to urgently review the revocation.
It also called for the establishment of a permanent framework for coordination among sectoral regulators whenever the licence, solvency, capital adequacy or continued existence of a listed company was in question.
The association said recapitalisation should be viewed as a mechanism for strengthening an institution rather than as punishment for failing to meet a regulatory threshold.
It urged regulators to first check if fresh capital was available, if the source was credible, and if the investment could return the institution to solvency before cancelling its licence and liquidating it.
ASHON said regulators should also consider enhanced supervision, capital-restoration plans, time-bound recapitalisation windows, restrictions on dividend payments, controlled changes of ownership, mergers and acquisitions, bridge financing and temporary management intervention.
“Licence cancellation should remain available where necessary, but it should be the result of a transparent resolution process rather than the first visible manifestation of regulatory failure,” it said.
The association further expressed concern that investors might have traded in Universal Insurance shares when a decisive regulatory action had already been taken or signed but had not been communicated through the appropriate capital-market channels.
It said a regulatory decision capable of eliminating the value or tradability of a listed company’s securities constituted information of significant market importance and should be communicated equitably and promptly.
ASHON called for a mandatory protocol requiring sectoral regulators to notify SEC and the Nigerian Exchange (NGX) before taking final action against a listed company, except in genuine emergencies involving systemic risks, fraud, dissipation of assets or other circumstances requiring immediate action.
It said SEC’s Regulatory Hub, launched in December 2025 to improve collaboration and information sharing among regulators, provided a foundation for such coordination.
The association also called for a market-wide disclosure protocol to ensure that information capable of materially affecting a listed company’s securities was disseminated simultaneously to investors.
It urged SEC, NAICOM, Central Bank of Nigeria (CBN), NGX, Corporate Affairs Commission (CAC) and other relevant regulators to develop a formal regulatory resolution framework for listed companies.
According to ASHON, the framework should provide graduated intervention measures before liquidation or licence cancellation, where legally permissible.
The association urged the regulators to examine transactions executed during any information gap and determine appropriate measures to protect market integrity and affected investors.
It said a regulatory impact assessment should also be conducted before the final revocation of a listed company’s licence.
It noted that this should take into consideration shareholders, retail investors, creditors, policyholders, employees, stockbroking firms, market liquidity, financial stability and public confidence.
ASHON also appealed to the Federal Ministry of Finance to exercise its supervisory responsibility and review the Universal Insurance matter.
It cited the ministry’s August directive to NAICOM to suspend enforcement of disputed recapitalization fees involving NICON Insurance Ltd. and Nigeria Reinsurance Corporation pending the determination of issues raised by the affected entities.
The association said the intervention demonstrated that regulatory firmness and regulatory review could coexist.
ASHON urged SEC to engage NAICOM immediately on the Universal Insurance matter, investigate the timing and dissemination of the revocation decision, and establish clear rules for inter-regulatory notification.
It also appealed to NAICOM to view the intervention as a call for better regulation rather than an attempt to undermine its independence.
“A strong regulator is not merely one that can close an institution. A strong regulator is one that can identify problems early, compel corrective action, attract fresh capital, protect policyholders and investors, preserve viable institutions and maintain public confidence.
“Recapitalisation should strengthen institutions, not destroy value. Regulation should protect the market, not inadvertently destabilise it. Enforcement should restore confidence, not erode it.
“Above all, the Nigerian investor must never become collateral damage in a dispute or disconnect between financial regulators,” the association said.
ASHON said the Universal Insurance case should become a turning point in Nigeria’s financial regulatory architecture.
It emphasised the need for regulators to work together before decisions were taken, rather than after market damage had occurred.
