By Nathaniel Zaccheaus, Abuja
The Senate on Tuesday approved a sweeping overhaul of Nigeria’s insurance regulatory framework, repealing the 29-year-old National Insurance Commission (NAICOM) Act and replacing it with a new law establishing the Insurance Regulatory Commission with far-reaching powers to sanction operators, rescue distressed firms and strengthen consumer protection.
The landmark legislation is expected to redefine the country’s insurance regulatory architecture by granting the new commission greater operational independence, broader supervisory authority and stronger enforcement mechanisms aimed at restoring confidence in the industry and aligning Nigeria with global best practices.
The bill was passed after the Senate adopted the report of its Committee on Banking, Insurance and Other Financial Institutions, chaired by Senator Mukhail Adetokunbo Abiru (APC, Lagos East), during plenary presided over by Senate President Godswill Akpabio.
Presenting the report, Abiru said the existing legal framework, enacted in 1997, had become inadequate to regulate the rapidly evolving insurance sector, leaving significant gaps that weakened oversight and exposed the industry to regulatory challenges.
“The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business,” Abiru said.
He noted that although NAICOM had made notable contributions to regulating insurance companies, brokers and loss adjusters over the years, the law establishing it had failed to keep pace with changing realities in the financial sector.
“Despite its significant contributions, the enabling law has become obsolete, failing to align with current realities and global best practices, and unable to keep pace with the evolving nature of the insurance industry, exposing numerous gaps in the law, necessitating urgent amendments,” he added.
The senator explained that the new legislation significantly expands the powers of the Insurance Regulatory Commission, enabling it to issue binding regulations, standards, directives, and guidelines; collaborate with local and international regulatory institutions; exchange supervisory information; and intervene promptly in troubled insurance companies before they threaten financial stability.
One of the major innovations contained in the legislation is the removal of bureaucratic bottlenecks that previously delayed regulatory action against distressed insurance firms.
The commission is also empowered to impose stiffer sanctions on erring operators, including heavier financial penalties, suspension or withdrawal of operating licences, additional liabilities for defaulting firms and the disqualification of directors and executives found culpable in regulatory breaches or institutional failures.
The legislation equally raises the bar for corporate governance by prescribing stricter qualifications for members of the commission’s governing board. Only professionals with demonstrable expertise in insurance, finance, law, risk management and corporate governance will qualify for appointment.
Beyond its traditional supervisory role, the commission has also been mandated to drive the overall growth and development of Nigeria’s insurance industry, reflecting a broader regulatory philosophy aimed at improving market stability, deepening insurance penetration and enhancing public confidence.
Abiru said the decision to rename the agency from the National Insurance Commission to the Insurance Regulatory Commission was intended to eliminate longstanding misconceptions about its responsibilities and better reflect its statutory mandate as the nation’s insurance regulator.
He disclosed that the committee subjected the bill to extensive legislative scrutiny, including a public hearing held on November 12, 2025, during which more than 50 memoranda were received from key stakeholders across the financial services sector.
Among those who made submissions were the Federal Ministry of Finance, the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the Federal Mortgage Bank of Nigeria (FMBN), the Nigerian Insurers Association (NIA), the Nigerian Council of Registered Insurance Brokers (NCRIB) and the Chartered Insurance Institute of Nigeria (CIIN).
According to Abiru, stakeholders unanimously supported comprehensive reforms to reposition the insurance industry for greater competitiveness.
“The inputs made on the proposed bill will go a long way in providing a comprehensive legal framework for the regulation and supervision of all manner of insurance businesses in Nigeria to ensure that the industry can successfully compete on a global level and improve the international competitiveness of Nigeria’s insurance industry,” he said.
Following clause-by-clause consideration by the Committee of the Whole, the Senate unanimously passed the bill for a third reading.
Commending the committee for the reforms, Senate President Godswill Akpabio described the legislation as a transformative intervention that would strengthen regulation, improve transparency and enhance investor confidence in Nigeria’s financial services sector.
The bill will now proceed to the House of Representatives for concurrence before being transmitted to President Bola Tinubu for assent.
Meanwhile, the Senate Committee on Banking, Insurance and Other Financial Institutions also cleared former Director-General of the Securities and Exchange Commission and current Deputy Governor of the Central Bank of Nigeria, Lamido Yuguda, for appointment as Chairman of the Board of the Asset Management Corporation of Nigeria (AMCON).
Although the committee granted Yuguda a “take a bow and go” screening based on his previous appearances before the Senate, lawmakers used the occasion to demand greater accountability from AMCON as it approaches its statutory wind-up in 2030.
Senator Mohammed Sani Musa called for a comprehensive briefing on the corporation’s performance, insisting that lawmakers must assess its achievements and outstanding obligations before its expected closure.
“We need to know where the corporation stands today, what it has achieved since inception and what outstanding responsibilities remain before its expected sunset,” Musa said.
Committee Chairman Abiru assured senators that AMCON’s management would provide the requested briefing in due course before the corporation’s final exit timeline.
