Senate Passes Landmark Insurance Reform Bill to Replace 1997 NAICOM Act

Nigeria's Senate has passed a significant insurance reform bill, modernizing the regulatory framework that has been in place since 1997. This landmark legislation aims to overhaul the National Insurance Commission (NAICOM) Act, introducing updated regulations and strengthening the industry's stability and consumer protection measures.

The bill, which received broad support during a plenary session presided over by Senate President Godswill Akpabio, seeks to align Nigeria's insurance sector with international best practices. Senator Mukhail Adetokunbo Abiru, chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, presented the report, noting that the 1997 Act had become inadequate for the rapidly evolving insurance market.

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The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business.

Abiru explained that while NAICOM has made contributions, its enabling law has not kept pace with global developments, creating gaps in regulation. The new law establishes an Insurance Regulatory Commission with expanded supervisory and enforcement powers. This commission will be empowered to issue regulations, collaborate with international bodies, and intervene in struggling insurance companies before issues escalate, ensuring greater financial system stability.

In a separate but related development, the Senate committee also cleared Mr. Lamido Yuguda for his appointment as the Chairman of the Board of the Asset Management Corporation of Nigeria (AMCON). Yuguda, formerly the Director-General of the Securities and Exchange Commission (SEC) and currently a Deputy Governor at the Central Bank of Nigeria (CBN), received overwhelming support from the committee.

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Despite its significant contributions, the enabling law has become obsolete, failing to align with current realities and global best practices, and unable to keep pace with the evolving nature of the insurance industry, exposing numerous gaps in the law, necessitating urgent amendments.