Insurance Sector Set For Recapitalisation As President Assents To Reform Bill 2025

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.”

The Nigerian Insurance Industry Reform Act (NIIRA) 2025 is described 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The new Act repealed and consolidated several outdated insurance laws into a single, modern legal framework and  provides for comprehensive regulation and supervision of all insurance and reinsurance businesses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 was frustrated by series of litigations by interested stakeholders in the sector.

According to presidential spokesman, Bayo Onanuga, 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 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.

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.