The National Insurance Commission (NAICOM) has expressed optimism following the passage of the new Insurance Consolidated Bill by the Senate, describing it as a transformative step for Nigeria’s insurance sector. The landmark legislation, which consolidates existing insurance laws, aims to revitalize the industry and boost its contribution to the country’s GDP.
In a statement, NAICOM emphasized that the bill is a “game changer” for the sector, which has struggled with low insurance penetration and an outdated legal framework for nearly two decades. The commission believes the new law will unlock the growth and prosperity of the insurance industry, creating a stronger and more competitive environment both regionally and globally.
“This is a significant triumph for Nigeria’s insurance industry,” NAICOM stated. “The new legislation addresses the industry’s need for a more robust legal and regulatory framework, enabling it to compete favorably in the African insurance market and beyond.”
Key Features of the Bill
The Insurance Consolidated Bill introduces several critical reforms to strengthen the industry:
- Enhanced Capital Requirements: The bill enforces higher minimum capital thresholds for insurance companies to ensure they are financially equipped to underwrite risks and safeguard policyholders.
- Risk-Based Supervision: It solidifies a risk-based approach to regulation, enabling NAICOM to more effectively monitor and manage systemic risks in the sector.
- Strengthened Consumer Protection: The legislation includes stricter measures to protect policyholders, promoting fairness and transparency in insurance practices.
- Streamlined Regulatory Framework: By consolidating existing laws, the bill provides greater clarity and consistency in regulation, making supervisory processes more efficient and effective.
Boosting the Economy
NAICOM underscored that the new framework will address long-standing challenges in the sector, including low public trust and minimal penetration of insurance products. With these reforms, the commission anticipates increased investor confidence, greater participation in the sector, and a more significant impact on Nigeria’s economy.
This legislative milestone sets the stage for accelerated growth in the industry, aligning Nigeria’s insurance framework with international best practices. Industry stakeholders are now looking forward to its implementation, which is expected to catalyze a new era of innovation, efficiency, and consumer confidence in the Nigerian insurance market.
