Joy Agwunobi
The National Insurance Commission (NAICOM) has commended the Senate for passing the new Insurance Consolidated Bill, expressing optimism that the legislation will stimulate growth and unlock the full potential of Nigeria’s insurance sector.
In a statement, NAICOM described the bill’s passage as a major milestone, noting that it represents a critical step in revitalising the industry after nearly two decades. The Senate, earlier this week, approved updated minimum capital requirements for insurance companies in Nigeria as part of reforms designed to strengthen the sector and address emerging challenges.
The legislation, known as the Nigeria Insurance Industry Reform Act, 2024, replaces several outdated laws governing the sector. It establishes a risk-based regulatory framework and significantly raises capital thresholds for insurance businesses. The revised requirements set the minimum capital for non-life insurance businesses at ₦15 billion, life insurance businesses at ₦10 billion, and reinsurance businesses at ₦35 billion. These figures represent substantial increases from the previous thresholds of ₦3 billion, ₦2 billion, and ₦10 billion, respectively.
NAICOM expressed confidence in the bill, describing it as a transformative measure for the insurance industry. According to the commission, the new law is expected to enhance the sector’s contribution to the economy by consolidating existing insurance regulations and providing a robust framework for managing all types of insurance operations.
The commission also highlighted the bill’s potential to address Nigeria’s historically low levels of insurance penetration. By introducing a comprehensive legal and regulatory foundation, the legislation is seen as positioning the sector to compete more effectively within the African market and internationally.
NAICOM emphasised that the legislation incorporates provisions for risk-based supervision, ensuring more effective monitoring of risks across the industry. Additionally, it strengthens consumer protection by promoting transparency and fairness in insurance practices, while modernising the regulatory framework to align with global standards.
The commission described the passage of the bill as a significant victory for the insurance sector, laying the groundwork for a more sustainable and competitive industry.
