The Nigerian Insurance Industry Reform Act (NIIRA) 2025 now requires any entity operating an online insurance business to secure a license from the National Insurance Commission (NAICOM) before offering services in the country.
As outlined in Section 201 of the recently enacted legislation—signed into law by President Bola Tinubu—platforms offering insurance services through web-based or electronic means must obtain authorisation from the Commission.
The new law grants NAICOM the authority to impose administrative sanctions on operators who fail to comply with the regulatory provisions.
Specifically, Section 201(1) states: “A person shall not commence or carry on web, internet, or electronic-based insurance or related business unless licensed by the Commission.”
The Act also mandates the Commission to issue periodic regulations for digital insurance operations in Nigeria to ensure consistent oversight and regulatory alignment.
Following Section 201, the Act mandates that all insurance providers must implement policies that reflect compliance with the following key financial regulations:
Know Your Customer (KYC)
Anti-Money Laundering (AML)
Combating the Financing of Terrorism (CFT)
Countering the Financing of Proliferation of Weapons of Mass Destruction (CPF)
These compliance measures are in line with both local laws and international standards aimed at preventing insurance entities from being used for illicit financial flows or activities tied to terrorism.
Insurers are expected to adopt strong internal controls to block any transactions linked to the development or movement of weapons of mass destruction.
In addition, NAICOM is empowered to formulate fresh guidelines, issue policies, and collaborate with global bodies to share intelligence and data critical to combating money laundering and terrorism financing within the industry.
The Act also prescribes stiff penalties for individuals or businesses operating unlicensed insurance ventures. Individuals found guilty face a fine of ₦25 million. In cases involving corporate entities, the fines are higher—₦50 million per principal officer, with a possibility of a two-year jail term.
President Tinubu’s assent to the NIIRA 2025 marks a pivotal shift in the regulation of the insurance sector, with reforms focused on digital compliance, compulsory insurance enforcement, and stricter capital requirements.
The Act repeals older laws, consolidating Nigeria’s insurance framework into a single, robust legal structure aimed at improving industry transparency and aligning with the national economic growth target of $1 trillion.
