Reps pass Insurance Reform Act 2024 to protect interests of policyholders in Nigeria

This new legislation recognizes two classes of insurance in the country—life and non-life insurance—and increases the minimum capital requirements across various insurance categories.

The new Act repeals several outdated laws, including the Insurance Act, Cap 117; the Marine Insurance Act, Cap M3; the Motor Vehicle (Third Party) Insurance Act, Cap M22; the National Insurance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.

The resolution of the House followed the consideration of the Senate bill presented during Wednesday’s plenary by House Leader, Prof. Julius Ihonvbere.

Lawmakers meticulously examined the clause-by-clause provisions of the bill and concurred with the Senate, signaling the final passage of the bill to an Act of the National Assembly.

The primary objective of the bill is to regulate the insurance industry to develop the sector and protect the interests of policyholders, prospective policyholders, and other stakeholders under insurance policies in ways that are consistent with the continued development of a viable, competitive, and innovative insurance industry.

The Act will also determine who can carry out insurance business in Nigeria, requiring insurance operators, directors, and management to meet specific suitability requirements.

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.

The bill also addresses the cancellation of operating licenses, stating that the commission can cancel a license if an insurer or reinsurer is not conducting business in accordance with sound insurance principles, has failed to meet the capital or solvency requirements, or has ceased to carry on the business of insurance for at least one year in Nigeria.

What you should know

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.

Mr. Philips expressed the organizers’ gratitude to the President and the entire management team of the Nigeria Football Federation for their support and partnership since the awards began in 2013.