Heralding a more reinvigorated Nigerian insurance sector
President & Chairperson Governing Board, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs. Ekeoma Ezeibe
By the President & Chairperson Governing Board, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs. Ekeoma Ezeibe, FCIB
Section 15(1) of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which was signed into law by the President of the Federal Republic of Nigeria on 31st July 2025, provides for the recapitalisation of insurance and reinsurance companies. It prescribes the minimum capital or risk-based capital requirements, as determined by the National Insurance Commission (NAICOM), whichever is higher, depending on whether the company is engaged in Life, General Business or Reinsurance.
Sub-section 6 of that section requires existing companies to comply with the provision within one year of the Act coming into effect. Sub-section 7(a) further provides that NAICOM shall cancel the licence of any company that fails to satisfy the provisions of Sub-section 1, while paragraph (b) provides that NAICOM shall, within 30 days of the expiration of the period stipulated in Sub-section 6, publish the names of companies that have recapitalised.
It was in obedience to these provisions that NAICOM, as a responsible regulator, went through all the necessary processes and, by the end of last week, Nigerian insurance consumers were presented with 50 financially sound insurance and reinsurance companies—48 insurance companies and two reinsurance companies.
The Nigerian Council of Registered Insurance Brokers (NCRIB), whose membership comprises all insurance broking companies in Nigeria and who, by virtue of their profession, serve as insurance advisers to consumers, while congratulating NAICOM, also felicitates Nigeria and its citizens on this new dawn for a stronger and more financially sound insurance sector.
As insurance brokers, perhaps the greatest gift that NIIRA 2025 has bequeathed to policyholders is embedded in the provisions of Section 15. The icing on this gift is the responsible and successful manner in which NAICOM discharged the duty imposed on it by the Act.
It is a well-known fact that NIIRA 2025 spearheaded a sweeping reform of the insurance sector, coming 22 years after the repealed Insurance Act of 2003. It is equally well known that the reforms were undertaken principally in the overarching interest of policyholders, with the objective of creating a more resilient economy that can adequately respond when unforeseen losses occur. Insurance should, without doubt, be the shock absorber of the economy.
It is heartwarming, as insurance brokers, to state some other very important and consumer-friendly provisions in NIIRA 2025.
First, the Act requires insurance brokers, by virtue of Section 43, to carry Professional Indemnity insurance of a minimum of N100 million (one hundred million Naira) or 50% of their preceding year’s brokerage income, whichever is higher. Although most insurance broking companies already carry indemnity covers running into several billions of Naira without compulsion, it was important that the minimum standard be increased and established by law. This is because professional insurance advisers to consumers must themselves be adequately protected against the consequences of wrongful advice to consumers. NAICOM, being methodical, ensured that this provision was complied with by insurance brokers.
Having ensured that the above was in place, NAICOM went on to give effect to the provisions of Section 212 of NIIRA 2025, which provides for the Insurance Policyholders’ Protection Fund. The Fund is financed by 0.25% of the gross premium income of every insurance and reinsurance company and 0.25% of the balance standing in the Security and Insurance Development Fund as at 31st December of the preceding year.
It is important to note that the uses of funds accruing to the Security and Insurance Development Fund were already provided for under the NAICOM Act of 1997, thereby necessitating NIIRA 2025 to provide only 0.25% of the residue for the Insurance Policyholders’ Protection Fund.
The funds are intended for the payment of unpaid claims admitted by or allowed against a licensed insurance or reinsurance company where such company becomes insolvent or has its licence cancelled by NAICOM.
Because the section further provides for the establishment of an Insurance Policyholders’ Protection Fund Committee to oversee the disbursement of the Fund, it became expedient for the Federal Government, through the Ministry of Finance, and NAICOM to establish and inaugurate the Committee on 15th May 2026, ahead of the conclusion of the recapitalisation process.
This means that a financial safety net has systematically been created, particularly to address possible fallout from the recapitalisation process. Importantly, funds disbursed will be treated as loans to the affected insurance and reinsurance companies and will constitute a first-line charge during the liquidation of such companies. This is a very important and well-thought-out provision, designed to ensure that the Fund continues to grow and remains available for the protection of policyholders.
Next is Section 99 of NIIRA 2025, which provides for the Road Accident Victims Compensation Fund, into which 0.5% of the underwriting profit on motor insurance business is to be paid by insurance companies.
Consequently, Section 100 provides for the establishment of a Road Accident Victims Compensation Committee, which will oversee the Fund. It is noteworthy and commendable that the Committee, when constituted, will include representatives of insurance intermediaries, such as insurance brokers, among its members.
The section stipulates the purposes for which the Fund will be used. It is, however, important to highlight that 65% of the Fund will be paid into a separate fund from which NAICOM will pay compensation in accordance with its regulations. This fund will provide compensation for death or bodily injury arising from a motor vehicle accident involving an uninsured vehicle or an unidentified driver (hit-and-run), as well as expenses reasonably incurred by any hospital in treating victims of accidents involving uninsured vehicles or unidentified drivers, up to an amount not exceeding N2 million per person treated, subject to review by NAICOM.
All in all, the future of Nigeria’s insurance sector remains very bright, with all hands on deck to deepen insurance penetration and bring the underserved into the insurance safety net.
As we commence a new work week following the completion of the recapitalisation process, the NCRIB congratulates NAICOM on the efficient and responsible manner in which the process was conducted.
We also congratulate the non-broking arms of the insurance industry. Together, we provide superlative services that will contribute to the further growth of our national economy.
To our clients – the consumers, we assure you that our industry is stronger, more resilient and more readily available to serve you, protect your interests and ensure the sustainability of your endeavours.
Why not? After all, we are:
*ONE INSURANCE INDUSTRY*
*President & Chairperson Governing Board*
*The Nigerian Council of Registered Insurance Brokers (NCRIB)*
