Nigeria increased the minimum capital requirement for insurers more than threefold as the industry regulator seeks to to improve the sector’s risk management.

Existing companies must comply by June next year, while it is effective immediately for the issue of new licenses, the Abuja-based National Insurance Commission said in an emailed statement. The regulator planned to introduce the new requirements last year, but the measure was challenged in court.

Insurers wanting to combine life and property and casualty businesses are required to have capital of at least 18 billion naira ($50 million), up from 5 billion naira, while the minimum for property and casualty business is 10 billion naira compared with 3 billion naira. The requirement for life insurance is 8 billion naira versus 2 billion naira and that for reinsurance is 20 billion naira compared with 10 billion naira.

The recapitalization will enable “insurance firms take on bigger risks,” Lagos-based CSL Stockbrokers said in a emailed statement. “We expect that this will lead to mergers, acquisitions and capital-raising activities that should stir activities in the equity market.”