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Expertise

This reform is more than a legislative update. It represents a strategic shift towards global best practices and signals the government’s determination to address challenges such as under-capitalisation, low consumer confidence, and fragmented regulation.
Introduction
On 31 July 2025, President Bola Ahmed Tinubu, GCFR, assented to the Nigerian Insurance Industry Reform Act (NIIRA) 2025, following its passage by the National Assembly. The Act repeals several long-standing laws and introduces a single, modern framework for regulating insurance and reinsurance in Nigeria. It is the most comprehensive review of insurance legislation in decades, aimed at promoting financial stability, protecting policyholders, and making the industry more competitive internationally.
This reform is more than a legislative update. It represents a strategic shift towards global best practices and signals the government’s determination to address challenges such as under-capitalisation, low consumer confidence, and fragmented regulation.
On 12 August 2025, NAICOM issued a circular setting out the roadmap for implementation, including capital thresholds, compliance timelines, asset admissibility rules, and sanctions, thereby providing practical guidance to operators.
Repealed Legislation
NIIRA 2025 consolidates and replaces the following statutes:
Insurance Act, Cap. I17, Laws of the Federation of Nigeria, 2004;
Marine Insurance Act, Cap. M3 Laws of the Federation of Nigeria, 2004;
Motor Vehicles (Third Party Insurance) Act, Cap. M22, Laws of the Federation of Nigeria, 2004;
National Insurance Corporation of Nigeria Act, Cap. N54, Laws of the Federation of Nigeria, 2004;
Nigeria Reinsurance Corporation Act, Cap. N131, Laws of the Federation of Nigeria, 2004.
Consequently, NIIRA 2025 removes overlaps in the multiferous insurance legislations, addresses gaps in regulation and provides a coherent basis for the growth of the sector. It also ensures that the legal framework reflects modern realities in the insurance market, rather than relying on outdated provisions.
Key Highlights
Revised Capital Requirements & Compliance Timeline
Capital thresholds for insurance operators have been raised substantially:
Type of Insurance Operator | Previous Minimum Capital | New Minimum Capital | % Increase |
Life Insurance Companies | ₦2 billion | ₦10 billion | 400% |
Non-Life Insurance Companies | ₦3 billion | ₦15 billion | 400% |
Composite Companies | ₦5 billion | ₦25 billion | 400% |
Reinsurance Companies | ₦10 billion | ₦35 billion | 250% |
All insurers must now maintain a Capital Adequacy Ratio (CAR) of 100% at all times. These changes are intended to strengthen the financial resilience of operators and improve their ability to absorb market shocks. Furthermore, insurance operators are expected to take practical steps to ensure compliance with the new Minimum Capital Requirements (MCR) within the prescribed 12-month timeframe, ending 30th July 2026.
NAICOM has confirmed that operators who successfully meet the new capital requirements and undergo verification will be issued fresh licences upon payment of requisite fees. This makes recapitalisation not only a balance sheet exercise but also a re-licensing process that re-validates an operator’s right to do business in Nigeria.
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