The Senate has repealed the National Insurance Commission (NAICOM) Act of 1997, describing the nearly 30-year-old legislation as outdated and inadequate for regulating Nigeria’s modern insurance industry.
To replace it, lawmakers passed the Insurance Regulatory Commission Bill, 2025, which is designed to strengthen oversight of the insurance sector, improve regulation and align Nigeria’s insurance industry with international standards.
The bill passed its third reading after the Senate adopted the report of the Committee on Banking, Insurance and Other Financial Institutions. It will become law if approved by the House of Representatives and signed by President Bola Tinubu.
Under the proposed legislation, the National Insurance Commission (NAICOM) will be renamed the Insurance Regulatory Commission, with expanded powers to supervise insurance operators, enforce compliance and impose tougher penalties for regulatory violations.
Presenting the committee’s report, its chairman, Senator Tokunbo Abiru, said the existing law no longer reflects the realities of Nigeria’s insurance market.
He disclosed that the committee conducted extensive consultations, including a public hearing and a review of more than 50 memoranda submitted by stakeholders before recommending the bill for passage.
According to Abiru, the proposed law will strengthen the regulator’s independence by granting it greater authority to perform its duties without undue interference.
The bill also empowers the commission to issue regulations, collaborate with local and international regulatory bodies, and intervene in troubled insurance companies to safeguard policyholders and maintain financial stability.
It further introduces stricter corporate governance standards by setting professional qualification and integrity requirements for members of the commission’s governing board.
The legislation also provides stiffer sanctions for regulatory breaches, including higher fines, licence suspensions, additional liabilities and the disqualification of individuals found responsible for regulatory failures.
Abiru added that the supervisory and inspection provisions have been updated to enable the regulator to respond more effectively to emerging risks within the insurance industry.
The bill also authorises the Minister of Finance to establish an interim management committee within 30 days if the commission’s governing board expires or is dissolved, ensuring uninterrupted operations.
In addition, the proposed law expands the commission’s responsibilities to include the administration, supervision, regulation, control, integrity and development of insurance business in Nigeria, while also protecting the commission and its officials from legal action for duties carried out in good faith.
Supporting the legislation, Senator Osita Izunaso described it as a comprehensive reform that would strengthen insurance regulation and provide Nigeria with a more robust legal framework for the sector.
