The Nigerian Senate has passed the Insurance Regulatory Commission Bill, 2025, marking a significant step toward modernising the country’s insurance regulatory framework. The bill, which passed third reading, repeals the National Insurance Commission (NAICOM) Act of 1997 and proposes the establishment of the Insurance Regulatory Commission (IRC) as the new industry regulator.
The legislation is designed to strengthen oversight of Nigeria’s insurance sector by expanding the regulator’s supervisory and enforcement powers while aligning the country’s regulatory framework with evolving international standards and industry practices.
Under the bill, the proposed IRC will be empowered to supervise insurers, reinsurers and other licensed operators using enhanced regulatory tools. It will also have broader authority to intervene in financially troubled insurance companies where necessary to protect policyholders, preserve market stability and support the orderly resolution of distressed institutions.
The bill introduces tougher enforcement measures for regulatory breaches, including higher financial penalties, licence suspension or revocation, and stronger investigative powers. It also contains governance provisions that allow the regulator to sanction directors and senior executives found responsible for serious violations, including temporary disqualification from serving on the boards or management of regulated insurance institutions.
To strengthen institutional governance, the legislation prescribes professional and academic qualifications for members of the commission’s governing board, with expertise in insurance, finance, law and related disciplines. It also empowers the Minister of Finance to constitute an interim management committee where necessary to ensure operational continuity during periods of transition or exceptional circumstances.
Lawmakers said the proposed legislation reflects the changing realities of Nigeria’s financial services industry, including technological innovation, evolving business models and growing consumer protection requirements. They argued that the existing NAICOM Act, enacted nearly three decades ago, no longer provides an adequate legal framework for effective regulation of the modern insurance market.
The reforms come as Nigeria continues to record one of the lowest insurance penetration rates globally, with insurance penetration remaining below one per cent of GDP despite the country’s large population and economic size. Industry stakeholders have long advocated stronger regulation, improved consumer confidence and reforms capable of attracting greater investment into the sector.
Analysts say a stronger regulatory framework could improve public confidence, encourage higher insurance adoption and enhance the industry’s capacity to mobilise long-term funds for economic development. However, they note that the effectiveness of the reforms will depend on transparent implementation, consistent regulatory enforcement and constructive engagement with industry operators.
The bill will now proceed to the House of Representatives for concurrence. If approved by both chambers of the National Assembly and signed into law by President Bola Tinubu, it will replace the 1997 NAICOM Act and usher in a new regulatory framework for Nigeria’s insurance industry.
