Proposed legislation renames NAICOM, expands regulatory powers and introduces tougher penalties for erring insurance operators……
The Senate has approved a bill seeking to overhaul Nigeria’s insurance regulatory framework, repealing the National Insurance Commission (NAICOM) Act of 1997 in a move aimed at modernising oversight of the country’s insurance industry.
The proposed Insurance Regulatory Commission Bill, 2025, passed third reading on Tuesday after lawmakers adopted the report of the Senate Committee on Banking, Insurance and Other Financial Institutions.
If passed by the House of Representatives and signed into law by President Bola Tinubu, the legislation will replace the nearly three-decade-old NAICOM Act, which lawmakers say no longer reflects the realities of Nigeria’s evolving insurance market.
One of the major changes contained in the bill is the renaming of the National Insurance Commission to the Insurance Regulatory Commission (IRC). The new regulator would also be granted wider powers to supervise industry operators, enforce compliance and impose stiffer sanctions on companies and individuals that violate regulatory standards.
Presenting the committee’s report, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Tokunbo Abiru, said the existing law had become outdated and was no longer sufficient to address the complexities of today’s insurance sector.
He explained that the committee engaged extensively with stakeholders before recommending the bill for passage, including holding a public hearing and reviewing more than 50 memoranda submitted by industry players and other interested groups.
According to Abiru, the legislation is designed to strengthen the operational independence of the insurance regulator by granting it greater authority to carry out its statutory responsibilities without undue external interference.
The bill also empowers the commission to issue regulations, collaborate with domestic and international regulatory agencies, and intervene in troubled insurance companies where necessary to safeguard policyholders and maintain confidence in the financial system.
In addition, the proposed law introduces stricter corporate governance requirements, including professional qualification standards and fit-and-proper criteria for members of the commission’s governing board.
To improve accountability, the legislation prescribes tougher penalties for regulatory violations. These include higher financial sanctions, licence suspensions, additional liabilities and the disqualification of individuals found culpable of serious regulatory breaches.
The bill further updates supervisory and inspection provisions to enable the regulator respond more effectively to emerging risks and changing market conditions.
To ensure continuity in the event of a leadership vacuum, the proposed law authorises the Minister of Finance to establish an interim management committee within 30 days whenever the commission’s governing board expires or is dissolved.
Lawmakers also expanded the commission’s statutory responsibilities to include the effective administration, supervision, regulation, control, development and protection of the integrity of Nigeria’s insurance industry.
The bill further grants legal protection to the commission and its officials against lawsuits arising from actions taken in good faith while carrying out their official duties, while also strengthening the regulator’s legal standing in court proceedings.
The Senate said the proposed reforms are intended to align Nigeria’s insurance regulatory framework with global best practices and position the industry for stronger growth, improved governance and greater investor confidence.
