President Bola Ahmed Tinubu, on Tuesday signed the Nigerian Insurance Industry Reform Bill, 2025 into law.
The landmark legislation repeals the 22 year-old Insurance Act of 2003, and consolidated several insurance laws which are no longer current, into a single, modern legal framework.
Announcing the development in a statement, presidential spokesperson, Bayo Onanuga, said the new Act provides for comprehensive regulation and supervision of all insurance and reinsurance businesses operating within Nigeria.
The development reaffirmed the present administration’s commitment to financial stability, economic development, and inclusive growth.
According to him, the new Act ushered in a new era of transparency, innovation, and global competitiveness for the insurance industry.
He said the signing further aligned with the federal government’s vision of achieving a $1 trillion economy by 2030.
Onanuga stated that as part of the Renewed Hope agenda for the insurance sector, the Act introduced critical measures including stringent capital requirements to ensure the financial soundness of operators; enforcement of compulsory insurance policies to enhance consumer protection; and the digitisation of the insurance market to improve access and efficiency.
Others include zero tolerance for delays in claims settlement; creation of dedicated policyholder protection funds, especially in cases of insolvency, and expanded participation in regional insurance schemes, including the ECOWAS Brown Card System.
The National Insurance Commission (NAICOM) is mandated to administer and implement the provisions of the NIIRA 2025 in a manner that unlocks the industry’s full potential and significantly improves insurance penetration across the country.
The reform introduced by the new law is expected to catalyse new investments, boost consumer confidence, and position Nigeria as a leading insurance hub in Africa.
There had been recent complaints over old Act, which analysts described as moribund amid new economic realities.
For instance, many of the Act’s prescribed penalties – for failing to purchase compulsory insurance – are not only outdated but paltry—in some cases, fines are as low as N2 or N5 or in pounds sterling, undermines deterrence and enforcement.
The old Act also lacked efficient consumer protection and dispute resolution as the Complaint Bureau established by the Act had proven insufficient to resolve insurance disputes effectively.
In.additiom, stakeholders and lawmakers had advocated for risk-based supervision, updated capital adequacy frameworks, tougher sanctions, and consolidation with other statutes such as the Marine Insurance Act and Third Party Road Accident Act.
Despite attempts to update the law in 2008, 2016, and 2020, none of the review processes produced an enacted replacement.
While the Insurance Act of 2003 was initially welcomed for providing a regulatory framework, the evolving market dynamics and systemic inefficiencies have exposed its weaknesses after two decades of operation.
Deji Elumoye and James Emejo
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