President Tinubu signs new insurance reform law to strengthen Nigeria’s financial and regulatory framework.
The law raises capital limits and enforces stricter rules for claims, digitization, and consumer protection.
President Bola Tinubu has signed into law the Nigerian Insurance Industry Reform Bill, 2025, marking a significant overhaul of the country’s insurance sector.
In a statement issued on Tuesday by his Special Adviser on Information and Strategy, Bayo Onanuga, the new law introduces a comprehensive framework for regulating and supervising all insurance and reinsurance operations in Nigeria.
The legislation, which was passed by the Senate in December 2024 and by the House of Representatives in March 2025, introduces a range of reforms aimed at strengthening the financial integrity and global competitiveness of the industry.
One of the key highlights of the Nigerian Insurance Industry Reform Act (NIIRA) is the upward revision of minimum capital requirements. Under the new law:
- Non-life insurance firms must now hold a minimum capital of N25 billion or meet risk-based capital (RBC) thresholds set by the National Insurance Commission (NAICOM), up from N10 billion.
- Life insurance providers must meet a new minimum of N15 billion (previously N8 billion) or RBC as determined by NAICOM.
- Reinsurance firms are now required to maintain a capital base of N45 billion, up from N20 billion, or meet RBC standards.
The RBC framework ensures that insurers hold capital proportionate to the specific risks they face, including insurance, market, credit, and operational risks.
Beyond capital requirements, the Act introduces several critical reforms:
- Mandatory enforcement of compulsory insurance to enhance consumer protection.
- Full digitization of insurance processes to increase accessibility and operational efficiency.
- Strict regulations on prompt claims settlement to prevent delays.
- Establishment of policyholder protection funds, particularly to safeguard customers in the event of insolvency.
- Expansion of Nigeria’s involvement in regional insurance frameworks such as the ECOWAS Brown Card Scheme.
According to Onanuga, the reform aligns with the administration’s broader vision of economic growth, transparency, and innovation. “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,” he said.
The bill, sponsored by Senator Tokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, repeals several outdated laws, including:
- The Insurance Act, Cap. I17 (2004)
- Marine Insurance Act, Cap. M3 (2004)
- Motor Vehicles (Third Party Insurance) Act, Cap. M22 (2004)
- National Insurance Corporation of Nigeria Act, Cap. N54 (2004)
- Nigeria Reinsurance Corporation Act, Cap. N131 (2004)
The newly enacted law consolidates these repealed statutes into a single, modern legal framework designed to promote financial stability and investor confidence in Nigeria’s insurance landscape.
