Senate swaps 1997 NAICOM Act for tougher framework

Nigeria's Senate has repealed the nearly three-decade-old National Insurance Commission Act of 1997, recognizing that the legislation had become obsolete and inadequate for regulating the nation's evolving insurance industry. In its place, lawmakers have passed the Insurance Regulatory Commission Bill, 2025, aiming to establish a contemporary legal framework for supervising the sector.

The new bill seeks to strengthen regulatory oversight and align Nigeria's insurance industry with international best practices. After scaling its third reading and adopting the report from the Committee on Banking, Insurance and Other Financial Institutions, the bill now awaits approval from the House of Representatives and presidential assent. If enacted, it will replace the existing NAICOM Act.

Key provisions of the proposed law include renaming the National Insurance Commission (NAICOM) to the Insurance Regulatory Commission. The regulator will be endowed with broader powers to supervise operators, enforce compliance more effectively, and impose significantly stiffer penalties for regulatory violations. Presenting the committee's report, Senator Tokunbo Abiru emphasized that the current insurance law no longer reflects the realities of the market.

Abiru explained that the committee conducted extensive consultations, including a public hearing and reviewing over 50 stakeholder memoranda, before recommending the bill. The legislation is designed to bolster the independence of the insurance regulator by granting it enhanced authority to operate without undue interference. The commission will gain powers to issue regulations, collaborate with local and international bodies, and intervene in distressed insurance companies to protect policyholders and maintain financial stability. Furthermore, the bill introduces stricter corporate governance standards and provides for tougher sanctions, including higher fines and license suspensions, for regulatory breaches.

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the current insurance law no longer reflects the realities of the country’s insurance market.