Joy Agwunobi 

The National Insurance Commission (NAICOM) has described the newly enacted Reform Act 2025 as a landmark achievement capable of reshaping the Nigerian insurance industry, boosting policyholder protection, expanding retail penetration, and strengthening the financial stability of operators. 

The Commission says the legislation, the first major overhaul of the sector’s regulatory framework since 2003  equips the industry with modern tools to contribute meaningfully to President Bola Tinubu’s vision of building a $1 trillion economy.

Speaking on a televised programme, Ekerete Ola Gam-Ikon, the deputy commissioner for insurance finance & administration at the NAICOM, extended the Commission’s appreciation to President Tinubu for signing the bill into law. 

He also commended the leadership of the National Assembly, highlighting the roles of Adetokunbo Abiru, chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, and Jaha Ahmadu, his counterpart in the House of Representatives.

Gam-Ikon stressed that the bill began its journey to law as a private member’s proposal, requiring significant legislative effort before it reached the President’s desk for assent.

“This was a private member’s Bill and so a lot of work was done at that level to then get the President’s assent,” he said. “Yes, of course, we worked with them in partnership.”

Detailing the contents of the new Act, Gam-Ikon described it as a modern, innovative piece of legislation designed to drive change across multiple areas of the insurance ecosystem. Moving from a framework last updated in 2003 to a 2025 version, he said, was nothing short of a “transformational journey” for the sector.

“For every page of that document are new opportunities,” he noted. “At NAICOM, we say it is a game changer because everybody’s interest seems to have been taken in.”

One of the most significant features, according to Gam-Ikon, is the enhanced protection for policyholders. This provision, he said, directly addresses long-standing perceptions that insurance in Nigeria does not deliver on its promises.

“You see policyholders struggling in Nigeria, and the story has always been that insurance in Nigeria doesn’t pay, that the regulator is weak. I think all of that has become historical simply by the signing of this by the President. We today sit well positioned to contribute to the development of the $1 trillion economy that the President envisions.”

Gam-Ikon explained that a critical reason for pushing the bill through the National Assembly was the need to strengthen the capital base of insurance operators. He pointed out that the new Act significantly increases the minimum capital requirements from ₦2 billion to ₦10 billion for life insurers, from ₦3 billion to ₦15 billion for general business operators, and from ₦10 billion to ₦35 billion for reinsurance firms.

The goal, he said, is to ensure the industry’s financial resilience, expand its income base, and allow for deeper engagement with individual policyholders — a segment that has historically received less attention than corporate clients.

Currently, as much as 80 percent of insurance sector income comes from corporate business. The new law, Gam-Ikon stated, is structured to drive growth in personal line or retail insurance, aided by digitisation and various technological solutions.

On claims settlement, he emphasised that NAICOM’s new leadership has adopted a zero-tolerance stance toward delays.

“We have  encouraged operators to settle claims promptly and fairly, and they have bought into our vision. That’s why we have the Policyholders’ Protection Fund — to take care of companies that might fall into distress so that policyholders won’t be stranded.”

According to Gam-Ikon, the feedback from insurance stakeholders has been overwhelmingly positive, reflecting a sense of renewed optimism about the industry’s direction, stating, “When we came in as a new administration, we set the tone for what we intended to achieve, focusing on policyholder protection and rebuilding public trust. We knew the challenges, especially around claims issues, and understood how the same negative story had persisted from generation to generation.”

He recalled that NAICOM had previously stepped in to take over a poorly performing insurance company where policyholders faced serious difficulties. This, he said, underscored the need for reform and heightened expectations around the legislative process.

“After almost 15 years of trying to get the amendment, the passage of the Act is remarkable. The reactions have been those of celebration among industry players,” Gam-Ikon added.

The deputy commissioner  also stressed that the development of the Act was not a solitary effort by the Commission, stating, “We worked with operators, insurance companies, reinsurance companies, brokers, loss adjusters, and agents. Everyone had an opportunity to contribute. The result is a transformational document signed by the President, with the intention for everyone to work together to achieve the change we seek.”

On recapitalisation, Gam-Ikon stated that the law provides a 12-month window for operators to meet the new minimum capital requirements. Those unable to comply will exit the market.

He clarified that the new approach to capital requirements moves away from the traditional concept of “capital base” tied to physical assets, such as buildings, toward minimum capital that is closer to cash. This, he explained, allows insurers to be more agile in meeting obligations.

“Sometimes, when you have claims to pay, you can’t sell your buildings to raise funds. This new structure puts companies in a financially sound position to do business.”

Gam-Ikon added that the bill aligns with the Finance Act and paves the way for market consolidation through mergers and acquisitions, resulting in a stronger, more efficient sector.

Additionally, the deputy commissioner underscored that one of the most significant benefits of the new insurance legislation is the enhanced capacity it provides for enforcement. The updated law introduces clearer provisions on penalties, empowering regulators to sanction individuals and organisations that fail to comply with insurance requirements. This, he explained, builds on ongoing collaborations with the police and the Federal Road Safety Corps, which have already improved enforcement of third-party motor insurance. With the new legal framework, the pace and efficiency of such efforts are expected to increase.

Beyond motor insurance, he noted that the scope of enforcement will also cover other mandatory policies. These include insurance for public buildings and those under construction, as well as the statutory group life policy that every employer is required to provide for employees. Health insurance enforcement will also be strengthened, ensuring that health professionals meet the coverage obligations mandated by law.

However, Gam-Ikon stressed that enforcement alone will not achieve the desired impact without widespread public awareness.  “What we basically need is to do a lot more awareness, a lot more education—sensitise people, let them become aware of the benefits of insurance so they can take advantage of these compulsory policies,” he said. 

Using motor insurance as an example, he explained that when all vehicles on the road are insured, both parties in any potential accident are protected. But where only one is insured, “it means there’s a problem somewhere.”

With the new legislation, he stressed, regulators are now in a much better position to close such compliance gaps and drive adoption across the board.

For NAICOM, the 2025 Reform Act is not just a piece of legislation; it is a catalyst for systemic change — one that seeks to rebuild trust, strengthen operators, protect policyholders, and ultimately position insurance as a central driver of Nigeria’s economic ambitions.