Passage of Insurance Reform Bill 2024 a milestone achievement for Nigerians- NAICOM

The House of Representatives passed the Nigeria Insurance Industry Reform Act, 2024, which establishes a comprehensive legal and regulatory framework for the insurance business and protects the interests of policyholders in Nigeria.

This new legislation categorizes insurance into two classes in the country—life and non-life insurance—and raises the minimum capital requirements across various insurance categories.

In a statement, NAICOM described the passage as a significant milestone toward transforming Nigeria’s insurance industry.

NAICOM expressed optimism that the signing of the bill into law would positively impact the industry, leading to improved penetration, increased public confidence, and enhanced competitiveness.

“The commission is enthusiastic about the prospects of the bill receiving assent from Mr. President, which will pave the way for the implementation of its provisions,” NAICOM stated.

“As the apex regulator of the insurance industry, we are committed to ensuring that the sector contributes positively to Nigeria’s financial landscape. We are confident that the Reform Bill will usher in a new era of growth and development for the insurance industry in Nigeria,” the commission added.

The new Act repeals several outdated laws, including the Insurance Act, Cap 117; the Marine Insurance Act, Cap M3; the Motor Vehicle (Third Party) Insurance Act, Cap M22; the National Insurance Corporation of Nigeria Act; and the Nigerian Insurance Reinsurance Corporation Act, Cap N131, all of which were part of the Laws of the Federation of Nigeria, 2004.

According to Part III of the proposed law, “A person shall not commence or carry out insurance, reinsurance, or related business in Nigeria unless licensed by the commission as an insurer or a reinsurer under this bill.”

It further provides that an application for licensing must be made to the commission in the prescribed form and accompanied by the necessary documents or information as required by the commission.

Section 16 of the proposed legislation requires insurers intending to commence business in Nigeria after the enactment of this bill to deposit 50% of the minimum capital requirement with the Central Bank of Nigeria.

Upon registration, 80% of the statutory deposit will be returned with interest within 60 days. Existing companies are required to deposit 10% of the minimum capital with the Central Bank of Nigeria.