Amanze ChinonyePresident Tinubu has signed the Nigerian Insurance Industry Reform Bill 2025 into law, setting in motion the most far-reaching transformation of the nation’s insurance sector in decades.
The newly enacted legislation, which introduces sweeping changes to capital requirements, regulatory oversight, and digital infrastructure, aims to rebuild public trust, deepen insurance penetration, and position the sector for long-term economic impact.
Join our WhatsApp ChannelThe bill’s signing was confirmed in statements from the Presidency and the National Insurance Commission (NAICOM), which described the law as “a new chapter for Nigeria’s financial services architecture.”
Under the Act, life insurance companies must now raise their minimum capital base to ₦10 billion, up from ₦2 billion. Non-life insurers are required to meet a ₦15 billion threshold, while reinsurance companies must comply with a ₦35 billion minimum up from the previous ₦10 billion benchmark. Alternatively, companies may meet risk-based capital levels as determined by NAICOM.
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Industry players have been granted a 12-month transition period from the date of presidential assent to meet the new requirements. Enforcement is expected to begin fully by mid-2026, according to insiders familiar with NAICOM’s implementation strategy.
NAICOM’s Commissioner for Insurance, Olusegun Omosehin, said the legislation will align Nigeria with global best practices by adopting a risk-based capital framework and increasing regulatory transparency.
“This is a long-overdue leap toward stability, trust, and inclusiveness,” Omosehin said. “The Act ensures that only credible, well-capitalized, and digitally agile insurers can operate in the market.”
One of the key components of the Act is a mandatory digital transformation agenda for all licensed insurers. Operators are now required to digitize underwriting, claims management, and customer engagement processes with real-time reporting to NAICOM likely to become standard.
The reform is also expected to trigger consolidation in the market, reduce the number of weak or inactive insurers, and attract more foreign direct investment into the sector. Analysts believe this could help Nigeria unlock the estimated ₦5 trillion potential of its insurance industry, which remains significantly underpenetrated in comparison to global and regional benchmarks.
The law also strengthens consumer protection through the creation of a Policyholders Protection Fund, and reinforces existing “no premium, no cover” provisions to limit unpaid claims disputes. It further expands enforcement of compulsory insurance in sectors such as public infrastructure, employer liability, marine, and oil and gas.
For everyday Nigerians, the law could mean better protection, faster claims processing, and wider access to essential coverage, if enforcement mechanisms are properly implemented.
The Act marks another bold move in the Tinubu administration’s economic reform agenda, coming on the heels of major changes in the oil and power sectors.
NAICOM is expected to release detailed regulatory guidelines before the end of Q3 2025, kicking off the first phase of implementation.
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