Insurance Companies Brace-Up For Re-Capitalisation As NAICOM Hails New Act

There will be a seeming shakeup in the Nigerian insurance industry with the signing of the Nigerian Insurance Industry Reform Act 2025 (NIIRA 2025), marking a defining moment in the sector’s history.

The Act, recently signed into law by President Bola Tinubu, has been described by the National Insurance Commission (NAICOM) as a new era of regulatory reform aimed at revitalizing the industry after over two decades under the Insurance Act 2003.

NAICOM in a statement seen by THE WHISTLER declared the law a game-changer that will deepen insurance penetration, protect policyholders, attract investment, and position Nigeria’s insurance sector for global competitiveness.

Before the new Act was signed into law, Nigeria’s insurance penetration of less than 1 per cent is among the lowest in Africa, far behind South Africa’s 13.7 per cent and Kenya’s 2.14 per cent.

The country’s insurance industry according to the regulator and experts lagged due to the lack of trust in the industry.

However, after decades, the regulator pushed for a new Act to repeal the over 20-year Insurance Act 2003.

The NIIRA Act mandates insurers to maintain minimum capital levels based on their risk profile.

For instance, the new Act mandates Non-life insurers to recapitalize to N25bn or ($16.39 million); Life insurers are mandated to have N15bn capital ($9.83m) while Reinsurers are mandated to recapitlise with N45bn ($29.49 million).

It is understood that insurance firms failing to meet these thresholds could face mergers or acquisitions.

In reaction to the new law, NAICOM said, “The new legislation marks a significant milestone in the country’s efforts to reinvigorate the insurance industry, over two decades after the enactment of the Insurance Act 2003.

“The Act marks a new era in the ongoing efforts to strengthen the Nigerian insurance industry, enabling it to compete favourably in the African insurance market and globally.

“NAICOM is confident that the new law will serve as a catalyst for growth, innovation, and enhance market confidence in the insurance sector, unlocking its full potential and significantly driving economic development.”

NAICOM said it believes that the new law is a promising opportunity to transform the industry and will have a high positive impact on the contribution of the insurance sector to the country’s GDP and economy as a whole.

“With its focus on strengthening the industry’s regulatory framework, enhancing consumer protection, and promoting a more robust and effective industry, the Act is set to unlock the growth and potential of the insurance sector.

“As the industry looks to the future, stakeholders are optimistic about the positive impact of the Act on the economy and the lives of Nigerians,” NAICOM said.

Insurance Companies Brace-Up For Re-Capitalisation As NAICOM Hails New Act is first published on The Whistler Newspaper