Tinubu signs landmark Nigerian insurance industry reform bill into law

In a significant move aimed at revamping Nigeria’s financial services landscape, President Bola Ahmed Tinubu has signed the Nigerian Insurance Industry Reform Bill, 2025 into law.

This groundbreaking legislation marks a bold step towards restructuring and modernizing the country’s insurance and reinsurance sectors.

The news was disclosed on Tuesday through a statement by Bayo Onanuga, the Special Adviser to the President on Information and Strategy.

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According to Onanuga, the new law is a pivotal part of the Tinubu administration’s broader agenda to stimulate economic growth and drive financial sector transformation.

The newly signed Act introduces comprehensive regulatory and supervisory frameworks for all insurance and reinsurance operations within Nigeria, with stricter capital requirements, improved policyholder protection, and an increased focus on transparency and digitisation.

Under the reforms, minimum capital thresholds have been significantly raised: non-life insurance operators must now hold a minimum of ₦25 billion or a risk-based capital (RBC) as determined by NAICOM (up from ₦10 billion), life insurance companies must meet ₦15 billion or RBC (up from ₦8 billion), while reinsurers are required to meet ₦45 billion or RBC (up from ₦20 billion).

The Risk-Based Capital model mandates that insurance firms assess capital adequacy based on the level of risk they undertake, including operational, credit, and market risks.

The Act also makes provisions for:

Compulsory enforcement of key insurance policies,
Digital transformation to improve market access and service delivery,
Zero tolerance for delays in claims payment,
Creation of a policyholder protection fund to safeguard customers in cases of insolvency,
Expansion into regional insurance schemes like the ECOWAS Brown Card.
Onanuga stated that the law marks the beginning of “a new era of transparency, innovation, and global competitiveness” for the Nigerian insurance sector, aligning with the Federal Government’s vision to grow the nation’s economy to $1 trillion.

The bill, championed by Senator Tokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, repeals several outdated laws including the Insurance Act (2004), Marine Insurance Act, and others, and provides a unified legal and regulatory framework for the modernisation of the industry.