The Nigerian Senate has approved the 2024 Insurance Industry Reform Bill, aimed at establishing a comprehensive legal framework for regulating and overseeing all insurance businesses in the country.
The bill consolidates various existing laws governing the insurance sector, including the Insurance Act (2003), the Marine Insurance Act, the Motor Vehicles (Third Party Insurance) Act, the National Insurance Corporation of Nigeria Act, and the Nigerian Reinsurance Corporation Act.
A key provision of the bill is the reduction of the minimum capital requirement for reinsurance businesses from N45 billion to N35 billion.
Named the Nigerian Insurance Industry Reform Bill, 2024 (SB. 393), the bill was passed after thorough clause-by-clause consideration during Tuesday’s plenary session.
The bill’s passage followed the Senate Committee on Banking, Insurance, and Other Financial Institutions’ report, presented by Senator Adetokunbo Abiru (APC, Lagos East), who chaired the committee.
Senator Abiru noted that the bill, which was first read on July 18, seeks to modernize and consolidate Nigeria’s insurance laws to address current challenges and foster growth in the sector. He stressed that the bill aims to create a robust legal and regulatory framework to help the insurance industry contribute to the country’s financial stability and economic growth.
“The current rule-based supervision framework has become outdated. To position Nigeria as a financial hub in Africa and one of the 20 largest economies globally, we must adopt risk-based supervision in insurance regulation,” Abiru explained.
During the public hearing, stakeholders unanimously supported the bill, highlighting that the existing insurance laws are outdated and unable to address modern challenges or support industry growth.
“These laws have been in place for over two decades and do not accommodate contemporary issues or foster innovation in the industry,” Abiru added. He emphasized that outdated laws have created regulatory inefficiencies, limiting the industry’s competitiveness on the global stage, making a reform necessary for improvement.
Senator Jimoh Ibrahim (APC, Ondo South) opposed the reduction of the minimum capital requirement for reinsurance companies to N35 billion, citing current economic conditions. He recommended maintaining the current N45 billion threshold, but his proposal was not accepted by the Senate.
After the bill’s approval, Deputy Senate President Barau Jibrin (APC, Kano North), who presided over the plenary, commended the committee for its efforts.
“This Act, once approved by the House of Representatives and signed by the President, will significantly transform our economy,” Jibrin said. “Dynamic economies require legislative reforms to stay in line with contemporary realities. This bill restructures the insurance ecosystem to better serve Nigeria’s needs. I am confident the country will benefit greatly from this law once implemented.”
The reform is expected to enhance the global competitiveness of Nigeria’s insurance sector and support the country’s goal of achieving a $1 trillion economy by 2030.