President Bola Ahmed Tinubu has signed the Nigerian Insurance Industry Reform Bill 2025 into law, officially making it the Nigerian Insurance Industry Reform Act (NIIRA) 2025. The new law has been described as one of the most important financial reforms in Nigeria in over two decades. Stakeholders say it will modernise the insurance sector, strengthen public confidence, and help Nigeria’s drive to build a $1 trillion economy by 2030.
The NIIRA 2025 brings together different pieces of legislation into one comprehensive law, making it the first major insurance reform since 2003. Experts believe this law will open new opportunities for growth, attract more foreign investment, and encourage innovation in the industry. However, there are also concerns about how local insurance companies will cope with the tougher capital requirements that the Act has introduced.
According to the Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, the new law was designed to meet current realities in the financial system and to put Nigeria’s insurance sector on the same level with global standards. He said the Act is “a win-win for every stakeholder” and described it as a key pillar for the $1 trillion economy agenda.
One of the biggest changes introduced by NIIRA 2025 is the new risk-based capital requirement. This means that insurance companies will no longer operate under a one-size-fits-all model. Non-life insurance companies will need to raise their capital from ₦10 billion to ₦25 billion or as determined by NAICOM based on their risk exposure. Life insurance companies will move from ₦8 billion to ₦15 billion, while reinsurance firms will face a rise from ₦20 billion to ₦35 billion. This is aimed at making the market more resilient and capable of handling big risks.
Another major provision is the creation of a Policyholders Protection Fund. This fund will guarantee that policyholders’ claims are paid even if an insurance company collapses. By protecting consumers, the government hopes to restore confidence in insurance, which many Nigerians have long avoided due to poor claims settlement.
The Act also makes digitalisation mandatory for insurers. From customer onboarding to claims settlement, insurance companies will be required to digitise their operations. This move is expected to improve efficiency, cut down delays, and attract Nigeria’s young population who are already used to fintech and digital services.
The law further expands compulsory insurance coverage in the country and aligns Nigeria with regional frameworks such as the ECOWAS Brown Card System, which allows cross-border motor insurance within West Africa. It also gives NAICOM the authority to set strict timelines for claims settlement, ensuring that insurers can no longer delay payments to customers.
Presidential spokesman Mr. Bayo Onanuga said the reform will bring in foreign investment and boost trust in the financial system. He noted that global investors are already showing interest in the Nigerian insurance market.
Professor Olajide Fadun of the University of Lagos described NIIRA 2025 as a catalyst for growth. According to him, Nigeria’s large population and weak currency make the country attractive to international players who will come in with fresh capital and insist on better governance practices. He also said the Act will reduce capital flight by giving Nigerian insurers more access to global reinsurance markets.
But not everyone is fully optimistic. Mr. Segun Bankole, Deputy General Manager for Corporate Communications at Sovereign Trust Insurance Plc, warned that many local insurance companies may struggle with the new capital requirements. He explained that without more patronage from Nigerians, some firms may be forced to borrow, merge with others, or even sell to stronger foreign companies. He also pointed out that insurance culture in Nigeria remains weak because of low purchasing power, saying more government-backed policies and public awareness are needed.
The law has however received praise from many industry stakeholders. The Chairman of the Nigerian Insurers Association (NIA), Mr. Kunle Ahmed, called it a bold step that will strengthen regulation, improve public trust, and modernise operations. The President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Babatunde Oguntade, said the Act unlocks the huge potential of the industry and urged the government to quickly release guidelines for its smooth implementation.
For NAICOM, Commissioner Omosehin made it clear that the real test will be in the implementation. He said “the taste of the pudding is in the eating,” stressing that only full compliance will show if the law can achieve its objectives.
Analysts believe three things will decide the success of NIIRA 2025: effective enforcement by NAICOM, capacity building for local insurers to meet the new standards, and nationwide public education campaigns to encourage more Nigerians to embrace insurance.
With this reform, Nigeria’s insurance sector is expected to play a much bigger role in the economy. If properly implemented, NIIRA 2025 could help Nigeria reduce risks, protect its citizens, and attract billions in new investments. But the challenge will be balancing the new requirements with the survival of indigenous companies.
For now, the industry is preparing for a new chapter that could transform it from a struggling sector into one of the pillars of Nigeria’s economic future.
