President Bola Tinubu has signed the Nigerian Insurance Industry Reform Bill, 2025, into law.
Gatekeepers News reports that the significant legislation aims to establish comprehensive regulations and oversight for all insurance and reinsurance businesses operating in Nigeria.
The bill, which was passed by the Senate in December 2024 and by the House of Representatives in March 2025, encompasses a broad range of reforms designed to strengthen the insurance sector. One of the key changes is the notable increase in minimum capital requirements for insurance companies.
Under the new regulations, the minimum capital requirement for non-life insurance businesses is set at N25 billion, up from the previous N10 billion. For life insurance, the new requirement is N15 billion, an increase from N8 billion. Reinsurance companies now face a minimum capital requirement of N45 billion, doubling the previous figure of N20 billion. These amounts can also be determined based on a risk-based capital (RBC) approach as set by the National Insurance Commission (NAICOM). This RBC model requires insurers to calculate their required capital according to the various risks they encounter, including insurance, market, credit, and operational risks.
Additionally, the new Act introduces several essential measures aimed at enhancing the industry’s stability and consumer protection. These include stringent capital requirements to ensure the financial viability of insurance operators, mandatory insurance policies for consumer protection, the digitization of the insurance market to improve accessibility and efficiency, and a commitment to addressing delays in claims settlements. Other provisions involve the creation of dedicated funds to protect policyholders, especially in cases of insolvency, and expanded participation in regional insurance initiatives like the ECOWAS Brown Card System.
“This development reaffirms the administration’s commitment to financial stability, economic development, and inclusive growth.
“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,” said Onanuga.
The insurance industry reform bill was sponsored by the Chairman, Senate Committee on Banking, Insurance & Other Financial Institutions, Tokunbo Abiru. It repealed the Insurance Act, Cap. I17, Laws of the Federation of Nigeria, 2004; the Marine Insurance Act, Cap. M3 Laws of the Federation of Nigeria, 2004; the Motor Vehicles (Third Party Insurance) Act, Cap. M22, Laws of the Federation of Nigeria, 2004; the National Insurance Corporation of Nigeria Act, Cap. N54, Laws of the Federation of Nigeria, 2004; the Nigeria Reinsurance Corporation Act, Cap. N131, Laws of the Federation of Nigeria, 2004; to provide for a comprehensive legal and regulatory framework for insurance business in Nigeria; and for related matters.
