The Senate has passed the Insurance Regulatory Commission Bill, 2025, paving the way for a comprehensive overhaul of Nigeria’s insurance regulatory framework aimed at strengthening oversight, improving corporate governance and enhancing protection for policyholders.
If signed into law by President Bola Ahmed Tinubu, the legislation will repeal the National Insurance Commission (NAICOM) Act of 1997 and replace it with a new legal framework designed to align the insurance industry with current realities and global best practices.
A key provision of the bill is the renaming of the National Insurance Commission (NAICOM) as the Insurance Regulatory Commission, a change the Senate Committee on Banking, Insurance and Other Financial Institutions said would eliminate longstanding confusion surrounding the agency’s name and better reflect its regulatory responsibilities.
Sponsored by the committee chaired by Senator Adetokunbo Abiru, the bill was passed after the Senate considered and adopted the committee’s report before approving it for a third reading during plenary on Tuesday.
The proposed legislation seeks to strengthen the independence of the insurance regulator by expanding its supervisory powers, improving corporate governance standards and providing stronger safeguards for policyholders.
To enhance regulatory compliance, the bill prescribes tougher sanctions for operators that violate regulatory requirements. These include increased financial penalties, suspension of operating licences, additional liabilities for erring institutions and the disqualification of individuals responsible for regulatory breaches from holding positions in insurance companies.
Presenting the committee’s report, Senator Abiru said the existing legal framework had become outdated and was no longer adequate to address the evolving needs of Nigeria’s insurance industry.
“The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business,” he said.
According to the lawmaker, although NAICOM has played a significant role in regulating insurance companies, brokers and loss adjusters, its enabling law has failed to keep pace with developments in the sector.
“Despite its significant contributions, the enabling law has become obsolete, failing to align with current realities and global best practices, and unable to keep pace with the evolving nature of the insurance industry, exposing numerous gaps in the law, necessitating urgent amendments,” Abiru added.
He explained that the proposed Insurance Regulatory Commission would enjoy greater institutional independence while exercising broader regulatory and supervisory authority over the industry.
The commission, he said, would be empowered to issue regulations, guidelines and directives to insurance operators, collaborate with local and international regulatory bodies, exchange supervisory information and intervene promptly in distressed insurance companies.
Abiru noted that the bill also grants the regulator stronger intervention powers to facilitate the timely resolution of failing insurance institutions, a move aimed at protecting policyholders, preserving public confidence in the insurance sector and promoting financial system stability.
The legislation further seeks to strengthen corporate governance by prescribing stricter qualifications for appointments to the governing board of the commission.
Under the proposed law, only individuals with proven expertise in insurance, finance, risk management, law and corporate governance will be eligible for appointment, ensuring that the commission is led by professionals with the competence and integrity required to effectively regulate the industry.
