By Nathaniel Zaccheaus, Abuja
In what has been described as a landmark shift in Nigeria’s financial landscape, the Senate has lauded the recently signed Nigerian Insurance Industry Reform Act (NIIRA) 2025 as a transformative step for the country’s insurance sector.
Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Tokunbo Abiru, hailed the Act as “a pivotal milestone” in Nigeria’s economic transformation.
He described it as one of the most sweeping reforms in the history of the nation’s financial services.
Signed into law on Tuesday by President Bola Tinubu, the NIIRA introduces a consolidated, modern legal framework to overhaul Nigeria’s insurance industry.
The Act replaces outdated and fragmented laws, raising capital requirements for operators, mandating end-to-end digitalisation, and enforcing faster insurance claim processes.
According to Senator Abiru, the new law is designed to foster innovation, strengthen regulatory oversight, and protect policyholders nationwide.
He said it addresses years of structural inefficiencies that have weakened the insurance sector and prevented it from reaching its full potential.
The Act introduces significantly higher capital thresholds for insurers and reinsurers, aimed at boosting financial stability and strengthening market confidence.
It also provides for the establishment of protection funds to secure the interests of policyholders in the event of insolvency or failure by insurance firms.
A significant reform within the NIIRA is the mandatory digitalisation of insurance operations across the industry.
This provision is expected to enhance transparency, improve service delivery, and increase access to insurance products, particularly among underserved and rural populations.
The law imposes strict timelines for the assessment and settlement of insurance claims, with clear penalties for delays.
Senator Abiru stressed that this is critical to restoring public trust and promoting greater accountability among insurance providers.
The NIIRA also strengthens the enforcement of compulsory insurance policies such as motor vehicle insurance, insurance for public buildings, and workers’ compensation schemes.
In addition, the Act enhances Nigeria’s role in regional insurance systems like the ECOWAS Brown Card Scheme, which facilitates cross-border insurance cooperation and coverage.
In a significant shift, the National Insurance Commission (NAICOM) has been granted expanded supervisory and enforcement powers to drive compliance, support innovation, and ensure discipline within the industry.
Senator Abiru noted that for decades, Nigeria’s insurance sector has struggled with low penetration, estimated at just 0.5 per cent of GDP, far below the African average.
He attributed this to regulatory inefficiencies, weak enforcement, low consumer confidence, and limited innovation.
He said the NIIRA was crafted to directly tackle these long-standing issues and unlock the sector’s vast potential.
He expressed gratitude to the leadership of the Senate, fellow lawmakers in both chambers of the National Assembly, members of his committee, NAICOM, and stakeholders across the insurance value chain for their commitment and collaboration in the passage of the bill.
Now that the President has signed the law, Senator Abiru said the focus must turn to implementation.
He expressed confidence in NAICOM’s ability to effectively deliver on the objectives of the NIIRA, stating that Nigeria stands at the threshold of a new era in insurance regulation and sectoral development.
“With NIIRA, we are laying the foundations for a safer, more resilient, and prosperous Nigeria,” he said.
Industry observers believe the NIIRA Act marks a defining moment in Nigeria’s effort to modernise its financial infrastructure.
It is expected to attract fresh investment, create jobs, boost investor confidence, and deliver improved, accessible insurance services to millions of Nigerians.
