Tinubu’s insurance reform sets $1trn economy goal

Joy Agwunobi

President Bola Ahmed Tinubu has signed into law the Nigerian Insurance Industry Reform Act (NIIRA) 2025, marking a major overhaul of Nigeria’s insurance sector and setting the stage for accelerated economic growth in line with the country’s ambition to attain a $1 trillion economy.

The newly signed legislation, described as a transformative milestone, repeals and consolidates several outdated insurance laws into a unified, modern legal framework designed to enhance regulatory oversight, improve industry standards, and attract new investments.

It is expected to strengthen transparency, encourage innovation, and boost Nigeria’s global competitiveness in the insurance market.

The bill was passed by the Senate in December 2024 and subsequently approved by the House of Representatives in March 2025, before receiving presidential assent. Among its most consequential reforms is the significant upward revision of minimum capital requirements for insurance companies—a long-anticipated move aimed at bolstering the financial resilience of operators in the industry.

Under the provisions of the Act, the minimum capital requirement for non-life insurance businesses has been raised to N25 billion or a risk-based capital (RBC) structure as determined by the National Insurance Commission (NAICOM), up from the previous N10 billion.

Life insurance companies will now be required to maintain a minimum of N15 billion or RBC, compared to the earlier threshold of N8 billion. The capital base for reinsurance companies has also been revised to N45 billion, up from N20 billion.

In an official statement signed by Bayo Onanuga, Special Adviser to the President on Information and Strategy, the NIIRA 2025 was described as a legislative leap that provides for “comprehensive regulation and supervision of all insurance and reinsurance businesses operating within Nigeria.”

According to the statement, “The Nigerian Insurance Industry Reform Act (NIIRA) 2025 repeals and consolidates several outdated insurance laws into a single, modern legal framework. The new Act provides for comprehensive regulation and supervision of all insurance and reinsurance businesses operating within Nigeria.”

The administration highlighted the signing of the Act as a reaffirmation of its commitment to financial stability, inclusive economic growth, and long-term development. It noted that the reforms contained in the NIIRA 2025 are central to the Renewed Hope Agenda for the insurance sector and align with broader national economic objectives.

Key policy measures introduced under the new law include the enforcement of stringent capital requirements to enhance the financial soundness of insurance operators, the compulsory implementation of select insurance policies to deepen consumer protection, and the full digitisation of the insurance market to improve accessibility and operational efficiency.

The law also mandates zero tolerance for delays in claims settlement and provides for the establishment of dedicated policyholder protection funds, especially in situations where companies become insolvent.

Additionally, the Act encourages Nigeria’s expanded participation in regional insurance initiatives such as the ECOWAS Brown Card System, further integrating the country into continental risk-pooling frameworks and cross-border coverage mechanisms.

Administration and implementation of the new law will be overseen by the National Insurance Commission (NAICOM), which is now mandated to drive the execution of the Act’s provisions in a manner that unlocks the industry’s full potential.

The Commission is expected to play a central role in driving the enforcement of the new capital thresholds, ensuring compliance with consumer protection provisions, and accelerating the digitisation of industry operations.

The federal government expressed confidence that the new law would revitalise investor interest, restore public trust, and transform Nigeria into a key insurance hub on the African continent.

The statement noted that the reforms are not only foundational to a more stable and resilient insurance system but also critical to unlocking the broader economic contributions of the insurance sector in Nigeria’s drive toward a $1 trillion economy.