1.5K
By Lizzy Chirkpi
In reshaping the nation’s insurance sector, President Bola Tinubu on Tuesday, signed into law the Nigeria Insurance Industry Reform Act (NIIRA) 2025, marking the most significant overhaul of the sector in decades.
The new legislation, announced in a statement by Bayo Onanuga, Special Adviser to the President on Information and Strategy, introduces strict regulatory frameworks designed to strengthen the financial backbone of insurers, boost consumer confidence, and drive Nigeria closer to a $1 trillion economy.
“The NIIRA Act 2025 ushers in a new era of transparency, innovation, and global competitiveness for the insurance industry. It aligns with the Federal Government’s vision of achieving a $1 trillion economy,” Onanuga said.
Passed by the Senate in December 2024 and the House of Representatives in March 2025, the NIIRA replaces several outdated laws, including the Insurance Act of 2004 and other long-standing statutes governing marine, vehicle, and reinsurance operations in Nigeria.
The Act introduces Risk-Based Capital (RBC) requirements, compelling insurers to align their capital reserves with the specific risks they undertake ranging from market and credit exposure to operational and underwriting risks.
Under the new regime, insurance companies will face tougher minimum capital requirements, stricter enforcement of mandatory insurance policies, and tighter deadlines for claims payments. Key reforms also include the creation of dedicated policyholder protection funds, mandatory digital transformation for insurers, and expanded integration with regional insurance schemes such as the ECOWAS Brown Card System.
“This development reaffirms the administration’s commitment to financial stability, economic development, and inclusive growth,” Onanuga added.
The legislation was sponsored by Senator Tokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance & Other Financial Institutions. Abiru emphasized that the reforms are critical to restoring public trust in insurance and attracting investment into the sector.
With its far-reaching changes, the NIIRA Act is expected to elevate Nigeria’s insurance industry to global standards ensuring solvency, protecting consumers, and unlocking broader economic growth.