The National Insurance Commission (NAICOM) has released new guidelines to regulate the operations of Insurtech companies in Nigeria, effective August 1, 2025. The move is aimed at establishing a structured and transparent framework for digital insurance services while ensuring consumer protection and regulatory compliance.
Under the new framework, Insurtechs are classified into two categories: those partnering with licensed insurance companies and those operating as standalone entities. Partnering Insurtechs will work with established insurers to deliver specific insurance products. Standalone Insurtechs, on the other hand, will require direct licensing from NAICOM and will be limited in their operations. They will not be permitted to underwrite high-risk sectors such as oil and gas, marine and aviation, retirement annuities, and government-related insurance services for ministries, departments, and agencies.
To operate legally, Insurtech companies must follow the licensing process outlined in the framework’s Schedule I. NAICOM has the authority to issue licenses with terms and conditions based on existing insurance laws.
The guidelines also mandate that Insurtechs meet various prudential and market conduct standards, including sound risk management practices, appropriate investment strategies, clear outsourcing arrangements, and data protection measures. The goal is to align their operations with existing regulations governing traditional insurers.
A formal arbitration process has been put in place to resolve disputes between partnering Insurtechs and insurance companies. Where consumers are dissatisfied with the outcome, they may escalate their complaints to NAICOM for further intervention.
All existing Insurtech firms and their associated insurance partners are required to comply with the new rules within 30 days from the date of commencement, setting a compliance deadline of August 31, 2025.
With this regulatory shift, NAICOM aims to encourage innovation in the insurance sector while safeguarding public interest and ensuring the long-term sustainability of digital insurance operations in the country.
