What to know about new insurance law
President Bola Tinubu recently signed the Insurance Industry Reform Bill 2025 into Law (NIIRA) marking a significant shift in conventional insurance operations in the country. Daily Trust reports that presidential spokesman, Bayo Onanuga said the NIIRA Act 2025 ushers in a new era of transparency, innovation, and global competitiveness for the insurance industry which aligned […]
President Bola Tinubu recently signed the Insurance Industry Reform Bill 2025 into Law (NIIRA) marking a significant shift in conventional insurance operations in the country.
Daily Trust reports that presidential spokesman, Bayo Onanuga said the NIIRA Act 2025 ushers in a new era of transparency, innovation, and global competitiveness for the insurance industry which aligned with the Federal Government’s vision of achieving a $1 trillion economy.
He disclosed that 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; 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, among other provisions.
He said 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.
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He expressed hope that 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.
Recapitalisation in the corner
Checks by Daily Trust show that the Insurance sector is set for a fresh round of recapitalisation as President Bola Tinubu assented to Nigerian Insurance Industry Reform Bill, 2025, which among other things provided a ‘Stringent capital requirements to ensure the financial soundness of operators.”
Industry leaders have described the Nigerian Insurance Industry Reform Act (NIIRA) 2025 as a landmark legislation to strengthen Nigeria’s financial sector and accelerate the nation’s march toward a $1 trillion economy.
The new Act repealed and consolidated several outdated insurance laws into a single, modern legal framework and provides for comprehensive regulation and supervision of all insurance and reinsurance businesses operating within Nigeria.
The Insurance sector was last recapitalised in 2007 with life underwriters’ minimum capital at N2 billion, general business N3 billion, composite firms N5 billion and reinsurance firms N10 billion. Other subsequent attempts at recapitalising the sector were frustrated by a series of litigations by interested stakeholders in the sector.
N15bn minimum capital requirement for non-life insurance coys, others
Further checks of the Act showed that it provides for N15 billion as the minimum capital requirement for non-life insurance companies, up from N3 billion; N10 billion for life assurance, up from N3 billion; and N35 billion for reinsurance businesses, up from N10 billion.
Section 15 of the Act states that a person shall not carry out an insurance business in Nigeria unless the insurer has, and maintains the minimum capital requirement.
“(a) In the case of non-life insurance business, the higher of N15,000,000,000 or risk based capital determined by the Commission. (b) Life assurance business, the higher of N10,000,000,000 or risk based capital determined by the Commission. (C) reinsurance business, the higher of N35,000,000 and risk based capital determined by the Commission,” the bill read.
Daily Trust understands that the increase in the capital base of insurance companies is necessitated by depreciation in value of currency and the Finance Act 2022, which has redefined the composition of the capital, inflation, international competitiveness, and AfCFTA competitiveness.
Insurance stocks will record boost- Expert
Speaking to Daily Trust, an insurance expert, Musa Bawa said the recapitalisation will see a boost in insurance sector stocks and improved trading in the Nigerian Stock Exchange (NGX)
“Just today after President Bola Tinubu assented to a new insurance reform law aimed at recapitalising the industry and boosting investor confidence, insurance stocks on the Nigerian Exchange Limited (NGX) surged 10 percent on Tuesday.
“You know the President assented to the bill to strengthen Nigeria’s financial sector and accelerate the nation’s march toward a $1 trillion economy.
“Within 24 hours after the bill was signed into law, as I speak to you, today Wednesday, the share prices of most insurance companies surged 10 per cent, according to market data m.
“Out of 17 insurance stocks, only two recorded zero movement from the previous day’s closing price, while 15 have moved,” Bawa explained.