The National Insurance Commission has hailed the passage of the new Insurance Consolidated Bill by the Senate and is optimistic that the legislation will unlock the growth, prosperity and potential of the insurance sector.
In a statement on Tuesday, NAICOM said the bill’s passage has marked a significant milestone in the country’s efforts to revamp the insurance industry after nearly two decades.
Earlier on Tuesday, the Senate approved new minimum capital requirements for insurance companies in Nigeria as part of reforms to strengthen the industry and address emerging risks.
The legislation, titled the ‘Nigeria Insurance Industry Reform Act, 2024,’ repeals and replaces several existing laws governing the sector. It also introduces a risk-based regulatory framework and adjusts capital thresholds for insurance businesses.
The newly approved requirements peg the minimum capital for non-life insurance businesses at N15 billion, life insurance businesses at N10bn, and reinsurance businesses at N35bn.
These figures mark a significant increase from the existing requirements of N3bn, N2bn, and N10bn, respectively.
NAICOM said, “The commission believes that the bill is a game changer for Nigeria’s insurance industry, and is going to have a high positive impact on the contribution of the insurance sector to the country’s GDP and economy as a whole. By consolidating existing insurance laws, the new legislation marks a new era in the ongoing efforts to strengthen Nigeria’s insurance industry. The bill provides a comprehensive framework for regulating all types of insurance businesses and ensuring a more robust and effective industry.
“The passage of the bill marks a significant triumph for Nigeria’s insurance industry, tackling the long-standing challenge of low insurance penetration in the country. The new legislation addresses the industry’s need for a more robust legal and regulatory framework, enabling it to compete favourably in the African insurance market and globally.”
Part of the highlights of the bills include risk-based supervision which allows for the consolidation of the risk-based approach to supervision, enabling regulators to effectively monitor and manage risks within the industry.
It also strengthens consumer protection, thus safeguarding the interests of policyholders and promoting transparency and fairness in insurance practices and an enhanced regulatory framework, among others.
