President Bola Tinubu has assented to the Nigerian Insurance Industry Reform Bill, 2025, to strengthen Nigeria’s financial sector and accelerate the nation’s march toward a $1 trillion economy.
With the assent, insurance companies will undergo a fresh recapitalisation exercise to shore up their capital bases to N10 billion and N15 billion, respectively, for Life and Non-Life businesses.
Now known as the Nigerian Insurance Industry Reform Act (NIIRA) 2025, it, however, repeals and consolidates several outdated insurance laws into a single, modern legal framework.
The new Act also sets a new capital threshold, which requires Life insurance firms to increase their capital from N2 billion to N10 billion, non–life insurance companies from N3 billion to N15 billion, and Reinsurance companies from N10 billion to N35 billion, translating to a 500 per cent capital raise.
The Nigerian Insurance Industry Reform Act (NIIRA) 2025 repeals and consolidates several outdated insurance laws into a single, modern legal framework.
Presidential spokesman, Bayo Onanuga, said the new Act provides for comprehensive regulation and supervision of all insurance and reinsurance businesses operating within Nigeria.
The NIIRA Act 2025 ushers in a new era of transparency, innovation, and global competitiveness for the insurance industry. It aligns with the Federal Government’s vision of achieving a $1 trillion economy.
The statement reads in part,” as part of the Renewed Hope Agenda for the Insurance Sector, the Act introduces critical measures such as: stringent capital requirements to ensure the financial soundness of operators, enforcement of compulsory insurance policies to enhance consumer protection ;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.”
Section 15 of the Act states that; (1)A person shall not carry on insurance business in Nigeria unless the insurer has and maintains the minimum capital, in the case of (a)non-life insurance business, the higher of(i) N15,000,000,000.00 or (ii)risk-based capital determined by the commission (b)life assurance business, the higher of (i)N10,000,000,000.00 or (ii) risk-based capital determined by the Commission and ( c) reinsurance business, the higher of (i)N35,000,000,000.00 and (ii) risk-based capital determined by the Commission.
Findings revealed a twist to the new phase of capitalisation: It is going to be Risk-based capital, whereby your level of capitalisation would be defined by the risk appetite of each underwriter, although the specified amounts would be the minimum entry capital.
While LEADERSHIP exclusively learnt that some underwriters have increased their capital to the new benchmark earlier than the Act, others who have yet to do so will have to firm up their recapitalisation process, whose deadline will be made known by the National Insurance Commission (NAICOM) anytime soon.
Reacting to this new development in an exclusive interview with LEADERSHIP on Tuesday, the managing director/CEO, Universal Insurance Plc, Dr. Jeff Duru said, the new law will redefine insurance business, enhances enforcement of insurance adoption, grants further power to the regulator to effectively supervise the insurance industry and punish erring firms, enhances professionalism and ethical practices in the industry.
Similarly, he stressed that the new law will also ensure underwriters recapitalise their businesses, while encouraging mergers and acquisitions that will ensure companies are financially sound to carry on their civic duties and responsibilities as expected of them. According to him, this development will allow some foreign investors to come into the country to acquire critical stakes, thereby strengthening the industry to compete globally, especially for big-ticket risk businesses in oil and gas, maritime and aviation sectors.
He expects companies to start approaching the public to raise funds for recapitalisation as soon as NAICOM announces the deadline.
Speaking on behalf of the insurance brokers in the country, the president of the Nigerian Council of Registered Insurance Brokers (NCRIB), Prince Babatunde Oguntade, expected the new law to revolutionise insurance Broking profession and ensure seamless and ethical business operation between brokers and underwriters while sanctioning charlatans who are operating in the insurance industry space.
While applauding insurance industry stakeholders for this feat, he believed the law would sanitise the industry, ensuring that brokers are stronger, and underwriters are honouring genuine claims as well as increase the industry’s contributions to the Gross Domestic Product (GDP) of the country.
