Tinubu Signs Landmark Insurance Industry Reform Bill into Law

President Bola Ahmed Tinubu has signed into law the Nigerian Insurance Industry Reform Act, 2025—marking a significant milestone in the overhaul of Nigeria’s insurance regulatory framework.

According to a statement issued on Tuesday by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the new legislation introduces comprehensive reforms to ensure robust regulation and supervision of all insurance and reinsurance businesses operating within the country.

The bill, which was passed by the Senate in December 2024 and by the House of Representatives in March 2025, aims to modernise the insurance sector, enhance financial stability, and expand consumer protection mechanisms.

A key feature of the Act is a substantial increase in the minimum capital requirements for insurers. Under the new law:

• Non-life insurance companies must now meet a capital threshold of ₦25 billion, or a risk-based capital (RBC) requirement as determined by the National Insurance Commission (NAICOM), up from ₦10 billion.

• Life insurance firms are required to meet a capital base of ₦15 billion or RBC (up from ₦8 billion).

• Reinsurance companies must now hold ₦45 billion, or RBC, up from the previous ₦20 billion.

The RBC framework obliges insurers to hold capital proportionate to the specific risks they face—including insurance, market, credit, and operational risks—ensuring greater financial soundness across the sector.

The new Act also introduces several forward-looking provisions, including:

• Enforcement of compulsory insurance policies to strengthen consumer protection

• Digitisation of insurance services to improve access and operational efficiency

• Strict timelines for claims settlement, with zero tolerance for delays

• Creation of dedicated policyholder protection funds, particularly in the event of insolvency

• Broader participation in regional insurance schemes, including the ECOWAS Brown Card System

“This development reaffirms the administration’s commitment to financial stability, economic development, and inclusive growth,” Onanuga said. “The NIIRA Act 2025 ushers in a new era of transparency, innovation, and global competitiveness for the Nigerian insurance industry. It aligns with the Federal Government’s vision of achieving a $1 trillion economy.”

The legislation, sponsored by Senator Tokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, repeals and consolidates several outdated laws, including:

• The Insurance Act, Cap. I17, LFN 2004

• The Marine Insurance Act, Cap. M3, LFN 2004

• The Motor Vehicles (Third Party Insurance) Act, Cap. M22, LFN 2004

• The National Insurance Corporation of Nigeria Act, Cap. N54, LFN 2004

• The Nigeria Reinsurance Corporation Act, Cap. N131, LFN 2004

The Nigerian Insurance Industry Reform Act, 2025, provides a unified, modern legal and regulatory framework tailored to support innovation, protect stakeholders, and drive sustainable growth in the nation’s insurance sector.

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