The Senate has approved the Nigerian Insurance Industry Reform Bill, 2024, introducing significant changes to modernize the sector. It mandates higher minimum capital requirements for insurance businesses, with non-life insurers needing ₦25 billion, life insurers ₦15 billion, and reinsurance companies ₦45 billion or risk-based capital as determined by the Commission.
Unlicensed insurance operators now face stricter penalties, including a ₦25 million fine, two years’ imprisonment, or both. For companies, the fine increases to ₦50 million for principal officers alongside the same prison term. This is a major shift from the ₦250,000 penalty outlined in the 2003 Act.
Senator Abiru Adetokunbo, presenting the bill, highlighted its goal of consolidating outdated laws and creating a robust framework to foster growth, innovation, and competitiveness. While Senator Jimoh Ibrahim opposed the ₦45 billion capital requirement for reinsurance firms due to economic concerns, Deputy Senate President Barau Jibrin argued the reform aligns with global standards and will positively impact Nigeria’s economy.
The bill introduces risk-based capital requirements, ensuring insurers account for operational, market, credit, and insurance risks. Following its passage, the bill awaits approval from the House of Representatives and presidential assent to become law.
