Nigeria’s House of Representatives has given its final approval to the Nigeria Insurance Industry Reform Act, 2024, a significant piece of legislation designed to modernize and strengthen the nation’s insurance sector. This new law establishes a robust legal and regulatory structure, prioritizing the protection of individuals and entities holding insurance policies.
A key feature of the Act is the clear delineation of insurance into two primary categories: life insurance and non-life insurance. Furthermore, the legislation mandates increased minimum capital requirements for insurance companies operating across different sectors, aiming to enhance the financial stability of the industry.
This comprehensive reform replaces several outdated legal frameworks that previously governed the insurance sector. Notably, it repeals the Insurance Act, Cap 117; the Marine Insurance Act, Cap M3; the Motor Vehicle (Third Party) Insurance Act, Cap M22; the National Insurance Corporation of Nigeria Act; and the Nigerian Insurance Reinsurance Corporation Act, Cap N131, all of which were remnants of the Laws of the Federation of Nigeria, 2004.
The House’s decision followed a thorough review of the Senate’s version of the bill, presented by House Leader, Prof. Julius Ihonvbere, during a recent plenary session. Lawmakers engaged in a detailed clause-by-clause examination, ultimately agreeing with the Senate’s provisions and finalizing the bill for enactment.
The core purpose of the new Act is to create a well-regulated insurance environment that fosters industry growth while safeguarding the interests of policyholders, potential policyholders, and other stakeholders involved in insurance agreements. It seeks to ensure the development of a dynamic, competitive, and innovative insurance industry. The Act also outlines the criteria for entities authorized to conduct insurance business within Nigeria, setting clear guidelines for industry participation.
