BREAKING: Senate passes bill increasing minimum capital of all insurance companies in Nigeria  

In the capital requirement enshrined in the bill, a person shall not carry on insurance business in Nigeria unless the insurer has and maintains, while carrying on that business, certain minimum capital.

“In the case of non-life insurance business, the higher of — (i) ₦25,000,000,000.00, or risk-based capital determined from time to time by the Commission 

“In the case of life assurance business, the higher of (i) ₦15,000,000,000.00,or risk-based capital determined from time to time by the Commission. 

“In the case of reinsurance business, the higher of (i) ₦45,000,000,000.00, andrisk-based capital determined from time to time by the Commission,” the bill partly reads.

The bill also proposes a penalty of N25 million for individuals found operating unlicensed insurance businesses in the country.

The passage follows the adoption of the report by the Committee on Banking, Insurance, and Other Financial Institutions during Tuesday’s plenary session.

The report was presented by the committee’s chairman, Senator Abiru Adetokunbo (APC-Lagos).

According to the bill, any individual who engages in insurance business without the proper licensing will be liable to a fine of N25 million, a prison term of two years, or both.

“The current insurance legislation is over two decades old and lacks provisions to address contemporary challenges and foster growth and innovation,” he said, adding that the former law hampered the industry’s global competitiveness.

NAN further quoted Jibrin as saying,  “Economies are dynamic and constantly changing, so it is incumbent upon the authorities of every nation to update their legislation to align with contemporary realities.   

“This is precisely what the passage of this legislation aims to achieve: to restructure the entire insurance ecosystem in line with current realities.   

“I am confident that the country will benefit greatly when the law is eventually assented to.” 

The lawmakers eventually passed the bill.

The fine in the passed bill is a 100-fold increase from the N250,000 fine for a similar offense in the Nigerian Insurance Act of 2003.

In determining the risk-based capital required, the bill states that the Insurance Commission shall take into consideration the capital for insurance risk, market risk, credit risk, and operational risk.

In determining the risk-based capital required, the bill states that the Insurance Commission shall take into consideration the capital for insurance risk, market risk, credit risk, and operational risk.