INTRODUCTION
On 5 August 2025, the President of Nigeria signed into law the Nigerian Insurance Industry Reform Act, 2025 (NIIRA 2025). This landmark legislation repeals the Insurance Act, 2003, and consolidates related provisions, ushering in a modern regulatory framework designed to strengthen financial resilience, improve market conduct, enhance governance, and protect policyholders. It aligns Nigeria's insurance sector with international best practice.
Policy Brief: Nigerian Insurance Industry Reform Act, 2025 (NIIRA 2025)
(NIIRA 2025). This landmark legislation repeals the Insurance Act, 2003, and consolidates related provisions, ushering in a modern regulatory framework designed to strengthen financial resilience, improve market conduct, enhance governance, and protect policyholders. It aligns Nigeria's insurance sector with international best practice.
1. Licensing and Insurer Specialisation
The New Act maintains the requirement for incorporation with the Corporate Affairs Commission ("CAC") and provides that no person may carry on insurance or reinsurance business in Nigeria without first obtaining an operating license from the National Insurance Commission (NAICOM). It further introduces a specialisation mandate: insurers may now be licensed only as either life or non-life companies. Composite insurers are required to restructure within five years to comply with this mandate, while reinsurers may continue to hold composite licences. This reform is expected to strengthen supervisory clarity and foster specialised risk pools, in line with global practice.
2. ECOWAS Brown Card Scheme
The New Act commits Nigeria to the ECOWAS Brown Card Insurance Scheme, a regional motor insurance initiative providing standardised cross-border coverage for accident victims, although national insurance uptake remains low. Effective participation in the scheme will depend on public awareness, digital infrastructure, and the establishment of a national bureau to coordinate cross-border claims.
3. Foreign Participation and Market Protection
NIIRA 2025 bars foreign insurers or their subsidiaries that lack a physical presence in their home country or are not part of a supervised financial group from operating in Nigeria. Nigerian insurers are prohibited from transacting with such entities, ensuring that domestic insurers remain the primary conduit for Nigerian risks. In addition, any Nigerian citizen or company that arranges or underwrites insurance for Nigerian risks abroad is deemed to be "carrying on business in Nigeria" and is therefore subject to NAICOM's oversight. By bringing these activities under the regulator's supervision, the Act closes a regulatory loophole, strengthens NAICOM's ability to monitor all insurance activity affecting Nigerian risks, safeguards the domestic market, and reinforces reliance on Nigerian insurers. This approach boosts market share, enhances local underwriting capacity, and promotes the overall growth and stability of the insurance sector.
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