Nigerian Senate Approves Landmark Insurance Industry Reform Bill

From Moshood Karim

The Nigerian Senate has approved the 2024 Nigerian Insurance Industry Reform Bill, marking a significant step towards modernising the country's insurance sector.

The bill was passed following a report by the Senate Committee on Banking, Insurance, and other Financial Institutions, chaired by Sen. Abiru Adetokunbo (APC-Lagos), who presented the findings during a plenary session on Tuesday.

 

Sen. Adetokunbo highlighted the bill’s comprehensive approach to consolidating various outdated laws governing Nigeria's insurance industry. Among the key statutes being addressed are the Insurance Act 2003, the Marine Insurance Act, the Motor Vehicles Third Party Insurance Act, and others. The bill aims to streamline the regulatory framework, creating a more robust and modern legal structure to guide the sector.

 

“The current insurance laws are over 20 years old and no longer align with the needs of today’s dynamic market,” said Adetokunbo. He further stressed that the existing rule-based regulatory framework has proven ineffective, with the bill's reforms aimed at fostering more efficient, risk-based supervision. This shift is intended to improve the overall competitiveness of Nigeria’s insurance industry on the global stage.

 

Adetokunbo also noted that the bill had garnered broad support during public hearings, with industry stakeholders emphasising the urgency of reform. Many experts had pointed out that the existing legislation was hindering growth and innovation, failing to meet the evolving demands of the sector.

 

While the bill has been broadly welcomed, not all senators were in agreement on every aspect. Sen. Jimoh Ibrahim (APC-Ondo) raised concerns over the proposed minimum capital requirement of N45 billion for reinsurance companies. Ibrahim suggested that this figure may be too high given the current economic climate and recommended a review of the policy before final passage.

 

Despite these concerns, Ibrahim acknowledged the necessity of updating Nigeria’s insurance laws to reflect contemporary economic conditions. “This bill will transform the entire insurance ecosystem, positioning the country for future growth,” he said. “It is critical that we adapt our legislation to meet the challenges of a rapidly changing economy.”

 

Once passed by the House of Representatives and signed into law by the President, the Insurance Industry Reform Bill is expected to strengthen the regulatory framework, provide new opportunities for innovation, and enhance the sector’s contribution to Nigeria’s economy.