Senate passes bill to repeal NAICOM Act, overhaul insurance regulation

Nigeria's Senate has passed the Insurance Regulatory Commission Bill, 2025, marking a significant step towards modernizing the country's insurance sector. This bill seeks to repeal the existing National Insurance Commission Act of 1997, establishing a new legal framework designed to enhance regulation and align Nigerian practices with international standards.

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The committee held a public hearing, engaged key stakeholders and reviewed more than 50 memoranda before recommending the bill for passage.

The proposed legislation, which successfully passed its third reading, aims to strengthen the powers of the insurance regulator, introduce more stringent penalties for regulatory breaches, and officially rename the National Insurance Commission to the Insurance Regulatory Commission. Senator Tokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, highlighted that the current law is outdated and no longer reflects the dynamic nature of Nigeria's insurance industry.

Abiru explained that the bill grants the regulator enhanced independence and powers to operate without undue interference. The commission will be better equipped to collaborate with both local and international regulatory bodies, issue directives, and intervene in struggling insurance companies to protect policyholders and ensure financial stability. Stricter corporate governance provisions are also introduced, setting professional qualification and suitability standards for the commission's governing board.

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According to Abiru, the proposed legislation seeks to strengthen the independence of the regulator by granting it enhanced powers to discharge its responsibilities without undue interference.

Furthermore, the bill introduces more robust enforcement measures, including increased fines, license suspensions, additional liabilities, and the disqualification of individuals found responsible for regulatory failures. It also updates provisions for supervision and inspection to enable the commission to respond more effectively to emerging challenges. If signed into law by President Bola Tinubu, the bill promises to foster a more stable and globally competitive insurance market in Nigeria.

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He said it also provides tougher enforcement measures, including stiffer fines, suspension of licences, additional liabilities and the disqualification of individuals found culpable for regulatory failures.