Insurers To Recapitalise As Tinubu Signs Insurance Reform Bill Into Law

President Bola Tinubu has assented to the Nigerian Insurance coverage Trade Reform Invoice, 2025, to strengthen Nigeria’s monetary sector and speed up the nation’s march towards a $1 trillion economic system.

With the assent, insurance coverage corporations will bear a recent recapitalisation train to shore up their capital bases to N10 billion and N15 billion, respectively, for Life and Non-Life companies.

Now generally known as the Nigerian Insurance coverage Trade Reform Act (NIIRA) 2025, it, nevertheless, repeals and consolidates a number of outdated insurance coverage legal guidelines right into a single, trendy authorized framework.

The brand new Act additionally units a brand new capital threshold, which requires Life insurance coverage companies to extend their capital from N2 billion to N10 billion, non–life insurance coverage corporations from N3 billion to N15 billion, and Reinsurance corporations from N10 billion to N35 billion, translating to a 500 per cent capital elevate.

The Nigerian Insurance coverage Trade Reform Act (NIIRA) 2025 repeals and consolidates a number of outdated insurance coverage legal guidelines right into a single, trendy authorized framework.

Presidential spokesman, Bayo Onanuga, mentioned the brand new Act offers for complete regulation and supervision of all insurance coverage and reinsurance companies working inside Nigeria.

The NIIRA Act 2025 ushers in a brand new period of transparency, innovation, and international competitiveness for the insurance coverage trade. It aligns with the Federal Authorities’s imaginative and prescient of reaching a $1 trillion economic system.

The assertion reads partially,” as a part of the Renewed Hope Agenda for the Insurance coverage Sector, the Act introduces important measures similar to: stringent capital necessities to make sure the monetary soundness of operators, enforcement of obligatory insurance coverage insurance policies to reinforce client safety ;digitisation of the insurance coverage market to enhance entry and effectivity;

Others embrace” zero tolerance for delays in claims settlement; creation of devoted policyholder safety funds, particularly in circumstances of insolvency and expanded participation in regional insurance coverage schemes, together with the ECOWAS Brown Card System.

“The Nationwide Insurance coverage Fee (NAICOM) is remitted to manage and implement the provisions of the NIIRA 2025 in a fashion that unlocks the trade’s full potential and considerably improves insurance coverage penetration throughout the nation.”

“The reform launched by the brand new legislation is predicted to catalyse new investments, enhance client confidence, and place Nigeria as a number one insurance coverage hub in Africa.”

Part 15 of the Act states that; (1)An individual shall not keep on insurance coverage enterprise in Nigeria except the insurer has and maintains the minimal capital, within the case of (a)non-life insurance coverage enterprise, the upper of(i) N15,000,000,000.00 or
(ii)risk-based capital decided by the fee (b)life assurance enterprise, the upper of (i)N10,000,000,000.00 or (ii) risk-based capital decided by the Fee and ( c) reinsurance enterprise, the upper of (i)N35,000,000,000.00 and (ii) risk-based capital decided by the Fee.

Findings revealed a twist to the brand new part of capitalisation: It’s going to be Threat-based capital, whereby your degree of capitalisation can be outlined by the danger urge for food of every underwriter, though the desired quantities can be the minimal entry capital.

Whereas LEADERSHIP completely learnt that some underwriters have elevated their capital to the brand new benchmark sooner than the Act, others who’ve but to take action should agency up their recapitalisation course of, whose deadline shall be made recognized by the Nationwide Insurance coverage Fee (NAICOM) anytime quickly.

Reacting to this new improvement in an unique interview with LEADERSHIP on Tuesday, the managing director/CEO, Common Insurance coverage Plc, Dr. Jeff Duru mentioned, the brand new legislation will redefine insurance coverage enterprise, enhances enforcement of insurance coverage adoption, grants additional energy to the regulator to successfully supervise the insurance coverage trade and punish erring companies, enhances professionalism and moral practices within the trade.

Equally, he burdened that the brand new legislation may even guarantee underwriters recapitalise their companies, whereas encouraging mergers and acquisitions that can guarantee corporations are financially sound to hold on their civic duties and duties as anticipated of them. In response to him, this improvement will enable some international buyers to come back into the nation to amass important stakes, thereby strengthening the trade to compete globally, particularly for big-ticket threat companies in oil and gasoline, maritime and aviation sectors.

He expects corporations to begin approaching the general public to boost funds for recapitalisation as quickly as NAICOM proclaims the deadline.

Talking on behalf of the insurance coverage brokers within the nation, the president of the Nigerian Council of Registered Insurance coverage Brokers (NCRIB), Prince Babatunde Oguntade, anticipated the brand new legislation to revolutionise insurance coverage Broking occupation and guarantee seamless and moral enterprise operation between brokers and underwriters whereas sanctioning charlatans who’re working within the insurance coverage trade area.

Whereas applauding insurance coverage trade stakeholders for this feat, he believed the legislation would sanitise the trade, guaranteeing that brokers are stronger, and underwriters are honouring real claims in addition to enhance the trade’s contributions to the Gross Home Product (GDP) of the nation.