By Sola Alabadan
The Commissioner for Insurance and Chief Executive, National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, said that the Nigerian Insurance Industry Reform Act 2025 (NIIRA) will lead to more employment generation, enhance the industry’s capacity to retain more risks locally, as well as facilitate economic growth in the country.
NIIRA, which was signed into law by President Bola Tinubu in July 2025, is designed to expand insurance penetration and improve industry stability.
There is a concensus among experts who spoke at the 10th annual conference of the Nigerian Association of Insurance and Pension Editors on Tuesday in Lagos, that the new law has strengthened the ability of the sector to improve its contribution to the nation’s Gross Domestic Product.
The industry experts maintained that the new legislation could position insurance as a key driver of Nigeria’s vision of building a $1 trillion economy.
The Commissioner, who was represented by the Director, Legal, Enforcement, and Market Development, NAICOM, Dr Talmiz Usman, at the conference said: “One of the key things is the repositioning of the sector in terms of the financial muscle. It has now introduced two tiers of capital. The first is the minimum capital requirement. Now the minimum capital has been shored up to N10 billion for Life, N15 billion for Non-Life, and N35 billion for Reinsurance. What this translates to is that insurance companies will have more capacity, higher businesses, take care of higher risks and retain local content. This will also lead to economic growth, employment generation, and more retention of local capacity domestication.
“The second layer is the Risk-Based Capital. This is not a one-size-fits-all. It is time for operators to provide capital that matches the level of their risk exposure. What the regulator is expected to do is to determine that, for an underwriter to underwrite any level of business, you must have a certain level of capital threshold in relation to your risk exposure. What that translates to is that, apart from what we are seeing in terms of that, yes, the company can write, it also translates to building confidence in the insurance sector, and I am sure that for the company to be able to underwrite this kind of business, it has the financial capability to do it.”
Usman asserted that with the NIIRA 2025, companies will be able to pay claims, saying, “The role of the regulator is to make sure that operators pay claims. And that will now boost the trust in the insurance sector.
Another thing that the new Act is encouraging is simplicity of operations. In this case, even the Proposal Form should be as simple as possible for the prospect to be able to understand what he/she is going into.
“The law also provides that before the commencement of your policy, you must issue a policy document which contains the terms of the contract. This was not captured in the previous legal instruments. The law says the policy document must be in simple and clear terms that anybody can see, read and understand. This alone will build trust and boost public confidence in the insurance sector.”
