Modernizing Maritime Commerce In Nigeria: Key Innovations Under The Nigerian Insurance Industry Reform Act 2025.

Abstract

Commercial transactions in Nigeria, particularly the importation of goods, are predominantly conducted via maritime transport. In other words, the carriage of goods by sea remains the primary mode through which trade and commercial activities are executed within the country. Given the inherently volatile nature of maritime transport, the need for adequate protection against unforeseen risks and liabilities cannot be overstated. As a result, marine insurance has become a critical component of the carriage of goods by sea.

Owing to the importance of this aspect of maritime commerce, it is imperative that marine insurance be subject to effective regulation, particularly within the Nigerian legal framework. This necessity led to the enactment of the Marine Insurance Act (MIA) in 1962, which historically governed marine insurance in Nigeria.

While the MIA was a product of its time, having been enacted in 1962, it has since become increasingly outdated considering contemporary commercial realities and advancements in the global insurance landscape. The imperative for reform became both evident and urgent. Consequently, this need prompted the enactment of the Nigerian Insurance Industry Reform Act, 2025, ('the Reform Act' or 'NIIRA'), which represents a comprehensive and transformative legal framework aimed at modernizing Nigeria's insurance industry, with far - reaching implications for maritime commerce.

This article critically examines the key provisions of the NIIRA, highlighting the paradigm shift from the outdated MIA to the current regulatory regime. It also explores the anticipated benefits of the NIIRA for the marine insurance sector and its broader impact on maritime transactions in Nigeria.

Introduction

Marine Insurance is an important aspect of carriage of goods by sea. It helps carriers, shippers and consignees/cargo owners to protect their vessel, crew and cargo on board during voyage. To this end, protection against unforeseen circumstances becomes imperative and by extension, the law to regulate the industry.

On 5th August 2025, the Nigerian Insurance Industry Reform Act 2025 received Presidential assent, fundamentally transforming Nigeria's insurance, including marine insurance regulatory landscape. Among its most significant achievements is the comprehensive modernization of marine insurance law, which consolidates and updates the provisions previously contained in the MIA. The Reform Act integrates marine insurance under Part XIV 1 of the Reform Act, introducing revolutionary changes that align Nigerian marine insurance law with contemporary international standards while addressing the unique challenges of modern maritime commerce.

Indeed, the MIA having become increasingly outdated in the face of digital commerce, evolving international standards, and modern risk management practices. The NIIRA consolidates insurance laws in the maritime industry, provides for reformed minimum share capital and risk - based capital requirements, compulsory insurance cover for petroleum/gas tankers, third party losses, digitization, regulating foreign participation, specialised licenses, etc.

These reforms provide for a transparent regulation of the industry, making it attractive to investors and stakeholders and creating a safe space for marine transaction in Nigeria.

Overview of the Key Innovations in the Reform Act and Comparison with the MIA

1. Consolidation of Marine Insurance into a Unified Insurance Regime

The MIA has been repealed by and integrated under Part XIV of the NIIRA. This integration eliminates the standalone legislation for marine insurance, bringing it under a unified regulatory regime supervised by the National Insurance Commission (NAICOM). By this consolidation, Marine insurance is now subject to general provisions of the Reform Act, such as licensing, capital requirements, and intermediaries, unless explicitly exempted.

While this consolidation also helps to promote having a one -stop -shop law regulating the Insurance industry, it is notable that all parts of the NIIRA do not apply to marine insurance as the Reform Act provides in Section 74 thereof that the general rules on insurance contracts in Part IX, such as breach of material terms and insurable interest, do not apply to marine insurance, preserving its specialized nature while allowing cross - application where appropriate.

2. Revolutionary Overhaul of Disclosure and Representation Framework

The most significant innovation in the Reform Act is the complete restructuring of disclosure obligations, moving from the traditional caveat emptor approach to a modern "fair presentation" framework.

Under the MIA, Section 20 required the assured to disclose "every material circumstance which is known to the assured" with limited guidance on what constitutes adequate disclosure. This led to disputes over the sufficiency of disclosure and harsh consequences for non - disclosure.

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