Commercial law firm TNP has raised critical concerns over certain provisions in the newly enacted Nigerian Insurance Industry Reform Act 2025 (NIIRA 2025), warning that aspects of the legislation may conflict with existing corporate governance laws and create regulatory bottlenecks.
Signed into law in August by President Bola Tinubu, NIIRA 2025 introduces sweeping reforms aimed at modernizing Nigeria’s insurance sector.
The Act mandates higher capital requirements for insurance firms, enforces compulsory insurance policies, and establishes comprehensive regulations for technology-driven providers, including fintechs.
Legal Analysis Calls for Caution
While industry stakeholders have largely welcomed the legislation as a catalyst for innovation, consolidation, and improved coverage across Nigeria, TNP’s legal analysis urges caution on several fronts.
- “While the Act enhances the Commission’s oversight of the insurance industry, certain provisions may inadvertently create governance concerns.
- For instance, preventing insurers from holding Annual General Meetings where annual returns are not approved could conflict with their statutory obligations under the Companies and Allied Matters Act 2020,” TNP stated in its report titled ‘Review of the Nigeria Insurance Industry Reform Act 2025’, obtained by Nairametrics.
The firm emphasized that the interplay between the Commission’s expanded regulatory powers and existing corporate governance frameworks requires careful alignment to avoid unintended legal conflicts.
Potential Jurisdictional Overlaps
TNP also highlighted potential jurisdictional overlaps in the regulation of mergers and acquisitions within the insurance sector.
While NIIRA 2025 grants the National Insurance Commission authority to approve or reject such transactions, the Federal Competition and Consumer Protection Commission (FCCPC) retains concurrent jurisdiction under the Federal Competition and Consumer Protection Act (FCCPA).
“Dual oversight could create procedural and timing complexities unless there is clear regulatory coordination between the Commission and the FCCPC,” the report noted.
Potentials of NIIRA 2025
Despite these concerns, TNP acknowledged the Act as a landmark development in Nigeria’s financial landscape.
The firm noted that NIIRA 2025 has the potential to deepen market penetration, bolster investor confidence, and enhance public trust in insurance as a driver of economic growth, provided its implementation is consistent and collaborative.
The report concluded that the success of the reforms will hinge on the Commission’s enforcement capacity, insurers’ commitment to compliance, and the broader public’s confidence in the sector.
What You Should Know
Some sweeping reforms under the NIIRA 2025 include:
- Section 96(1)(b) says Nigerian motorists are now legally permitted to present their motor insurance certificates in digital form during routine checks or accidents. This is a major shift from the previously required hardcopy documentation.
- Section 37 (1) of the Insurance legislation says Unlicensed insurance agents across Nigeria are liable, upon conviction, to a six-month jail term, with penalties including a fine of N500,000.
- Section 201 mandates that people running insurance businesses online must obtain a license from the National Insurance Commission to practice in Nigeria.
