Joy Agwunobi
The National Insurance Commission (NAICOM) has reiterated its commitment to strengthening enforcement, boosting claims settlement, and rebuilding public trust in Nigeria’s insurance industry, emphasising that the recently enacted Insurance Act has significantly enhanced its regulatory powers.
Ekerete Ola Gam-Ikon, deputy commissioner for insurance (finance & administration) of NAICOM, stated in a televised interview that the new legislation has been given teeth to bite, unlike before, enabling the regulator to decisively penalise erring companies while also addressing cases of insurance fraud by customers.
According to Gam-Ikon, the new NAICOM administration, which came into office last year, set out a clear agenda to restore public confidence in insurance services.
“Our agenda was to rebuild public trust, and for you to rebuild public trust, the way to go for insurance is to pay your claims,” he explained. He noted that the Commission immediately declared zero tolerance for claims delays and enforced prompt settlement across the industry, even intervening to take over an insurance company unable to meet its obligations.
The deputy commissioner stressed that the new Act reinforces this enforcement drive by empowering NAICOM to act swiftly against defaulting operators. He encouraged insurance companies to report fraudulent claims by policyholders, adding that the regulator is ready to escalate such matters and raise public awareness on fraud risks.
Minimum capital verification and recapitalisation
Speaking on recapitalisation, Gam-Ikon explained that NAICOM will rigorously verify that all declared capital is available and in the name of the company, ensuring it can be converted to cash to meet claims obligations. “We’ve had instances where capital was tied up in assets like buildings still in the names of directors or shareholders. That will no longer be acceptable,” he said.
Under the new capital requirements, life insurance companies must increase their capital from ₦2 billion to ₦10 billion, general insurance companies from ₦3 billion to ₦15 billion, and reinsurance companies from ₦10 billion to ₦35 billion. Gam-Ikon noted that although Nigeria still lags behind global capacity benchmarks, the risk-based capital framework will ensure companies only engage in business volumes their capital can support.
He added that the recapitalisation process may trigger mergers and acquisitions, even among strong players, to expand capacity. However, NAICOM’s priority will remain the protection of policyholders’ interests during any ownership changes.
Policyholders’ protection fund
The Deputy Commissioner also highlighted the introduction of a Policyholders’ Protection Fund under the new law. Funded by contributions from insurers’ premiums, it will provide financial relief when an insurance company becomes too weak to meet its obligations.
He said similar funds in other countries have contributed to higher insurance penetration and expressed optimism that Nigeria will experience similar growth.
On third-party motor insurance, Gam-Ikon said the new Act has strengthened enforcement provisions but noted that NAICOM had already taken steps to address the issue before the law was passed. He recalled that the Commission launched a nationwide programme to enforce compliance and, more importantly, to educate motorists on the real benefits of having valid third-party cover.
“The idea is simple,” he explained. “You put your car on the road, I put mine on the road — you have third-party cover, I have third-party cover — and we are both protected. If an accident occurs as a result of your actions, I am covered, and vice versa. That mutual protection is the essence of third-party insurance.”
Gam-Ikon observed that this awareness drive has led to “a new thinking and a new appreciation” among motorists, shifting perceptions away from the old notion that third-party insurance is “just a paper.” He stressed that insurance companies are now paying significant claims for third-party incidents, further proving the policy’s value.
He added that the new Act re-emphasises the importance of compliance, while digitisation has made obtaining and verifying third-party policies far easier. Motorists can now purchase a policy online through NAICOM’s platform or the industry-wide portal, download the certificate onto their phone or other devices, and present it instantly to law enforcement or inspection officers.
According to the deputy commissioner, the policy details can then be verified in real time through a centralised verification platform, ensuring authenticity and convenience.
Leveraging insurtech for affordable coverage
Additionally, he highlighted that the new Act will leverage technology — particularly insurtech to make insurance more affordable, accessible, and adaptable to consumers’ needs. According to him, there are now solutions in the market that allow motorists to purchase micro-motor insurance for as little as ₦500.
He noted that the same technology can be applied to other forms of insurance, enabling consumers to easily buy whatever coverage they need from health and travel to goods-in-transit policies — directly through their mobile devices.
Gam-Ikon added that NAICOM, anticipating this shift, had already released operational guidelines for insurtech providers shortly before the new Act was signed into law. These guidelines, he explained, set a regulatory framework for innovation while ensuring consumer protection, thereby creating opportunities for new entrants and established players to design products that improve insurance uptake and customer experience.
He further explained that the new Act consolidates multiple outdated laws, including the Motor Insurance Act of 1945 and Marine Insurance provisions, into a modern legislative framework designed to transform the industry.
Key reforms include stronger consumer protection, compulsory coverage requirements, improved financial soundness standards, claims settlement timelines, process digitisation, and expanded insurance scope through ECOWAS protocol compliance.
Gam-Ikon said these measures position the insurance industry to contribute meaningfully to the federal government’s goal of building a $1 trillion economy. “This is the moment when the insurance industry begins to make a significant impact,” he added.
