Reps Passes Nigerian Insurance Industry Reform Act Bill

• One of the objectives of the bill is to regulate the insurance industry to protect the interests of policyholders, prospective policyholders, and other stakeholders under insurance policies.
• The bill is set to introduce crucial reforms and regulatory changes to the industry.
• Once signed into law, insurance and reinsurance companies will be required to operate under the new capital base thresholds.

The Nigerian House of Representatives has passed the Nigerian Insurance Industry Reform Act Bill, 2025 (SB. 393), marking a significant development in the country’s insurance sector.

Eko Hot Blog gathered that the bill presented by Hon. Julius Ihonvbere, representing the Owan Federal Constituency, the bill is set to introduce crucial reforms and regulatory changes to the industry.

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Part of the day’s Bills was the Bill for an Act to repeal the Insurance Act, Cap. I 17, Laws of the Federation of Nigeria, 2004; the Marine Insurance Act, Cap. M3, Laws of the Federation of Nigeria, 2004.

The Motor Vehicle (Third Party) Insurance Act, Cap. M22, Laws of the Federation of Nigeria, 2004; the National Insurance Corporation of Nigeria, Act, Cap. N54, Laws of the Federation of Nigeria, 2004;l.

The Nigerian Reinsurance Corporation Act, Cap. N131, Laws of the Federation of Nigeria, 2004 and Enact the Nigerian Insurance Industry Reform Act, 2005 to Provide for a Comprehensive Legal and Regulatory Framework for Insurance Business in Nigeria and for Related Matters (SB. 393).

The bill’s objectives include:

1. Regulating the insurance industry to protect the interests of policyholders, prospective policyholders, and other stakeholders under insurance policies.
2. Ensuring the development of a viable, competitive, and innovative insurance industry.
3. Determining who can carry out insurance business in Nigeria and setting requirements for insurance operators, directors, and other key stakeholders.
4. Increasing the minimum capital requirement for various insurance classes, with different capital thresholds for life and non-life insurance businesses.

The Nigerian Senate’s approval of the 2024 Nigerian Insurance Industry Reform Bill in December 2024 signifies a transformative step for the country’s insurance and reinsurance industries, as it sets new minimum capital requirements for various sectors.

In a major overhaul, the Bill will introduce the following new operating capital bases for the insurance industry:

1. Life insurance businesses: Raised to N10 billion from N2 billion
2. Non-life insurance businesses: Raised to N15 billion from N3 billion
3. Reinsurance businesses: Raised to N35 billion from N10 billion

These changes represent a significant increase in the capital requirements since the last recapitalization exercise in 2007.

Following the successful navigation of legislative processes, the Bill now awaits presidential approval. Once signed into law, insurance and reinsurance companies will be required to operate under the new capital base thresholds.

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The Senate’s passage of this comprehensive reform bill, which was adopted following the report by the Committee on Banking, Insurance, and other Financial Institutions, highlights the Nigerian government’s commitment to strengthening the insurance sector and fostering a competitive business environment.

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