Nigerians now have stronger legal backing when purchasing insurance, thanks to the recently enacted Nigerian Insurance Industry Reform Act (NIIRA) 2025. Signed into law by President Bola Tinubu on August 5, the Act introduces a comprehensive overhaul of the insurance sector, aiming to eliminate fraudulent operators, enhance public confidence, and ensure wider insurance coverage across the country.
The NIIRA 2025 imposes stringent penalties on individuals and organizations engaging in insurance activities without proper licensing. Unlicensed individuals risk fines of up to N25 million or imprisonment for two years—or both—while corporate offenders will have their top officials fined N50 million each or similarly jailed. These measures are designed to deter quacks from infiltrating the industry and misleading the public.
A significant shift introduced by the Act is the expansion of compulsory insurance coverage. Construction of any building exceeding one floor now requires mandatory insurance against construction-related risks. Public buildings such as schools, hospitals, malls, and hostels must be insured against hazards like fire, structural collapse, floods, and storms. Failure to comply could lead to fines of up to N1 million or a year in jail.
Fuel-related businesses, including petrol and gas stations and transport tankers, are also affected. They must now carry insurance to cover third-party damages in the event of explosions or accidents. Proof of insurance must be visibly displayed at filling stations or included in consignment documents.
To support emergency preparedness, the Act also establishes a Fire Services Maintenance Fund, financed by insurance companies. This fund will equip and support fire service agencies across the country.
Notably, the federal government is mandated to lead by example, with all government assets and personnel now required to be insured. NAICOM, the national insurance regulator, is tasked with determining the scope of these required coverages.
Industry leaders have praised the reforms. Akinjide Orimolade of Stanbic IBTC Insurance commended the law’s focus on compulsory insurance, noting it could improve public awareness, boost insurance uptake, and increase government revenue. He highlighted the affordability of premiums and called on insurers to educate the public.
Ademola Abidogun of Guinea Insurance believes the recapitalisation and regulatory provisions will enhance the sector’s sustainability and risk-carrying capacity. He also noted the reforms align with the government’s long-term plan to extend insurance coverage nationwide.
Moruf Apampa of NSIA Insurance hailed the crackdown on unlicensed operators as a “game-changer” that will build public trust. He also welcomed the mandatory insurance for landlords and public property owners, especially in urban areas prone to disasters.
Overall, analysts agree that NIIRA 2025 marks a pivotal moment for Nigeria’s insurance industry, promising broader protection for citizens and a stronger, more accountable insurance sector.