By David Akinmola
President Bola Tinubu has signed the long-awaited Insurance Reform Act into law, marking a major milestone in Nigeria’s efforts to modernise its financial services sector and unlock the full potential of its insurance industry in line with the country’s ambition to build a $1 trillion economy.
The newly signed law, which repeals and replaces outdated insurance legislation, introduces sweeping reforms aimed at improving corporate governance, strengthening regulatory oversight, protecting policyholders, and promoting broader insurance penetration across all segments of the population.
Presidency sources confirmed on Monday that the signing of the Act is part of a wider economic reform agenda designed to deepen investor confidence, foster financial inclusion, and position the insurance sector as a critical driver of long-term capital formation and economic resilience.
“This legislation signals a new era for Nigeria’s insurance industry,” a senior presidential aide noted. “It aligns regulatory frameworks with global standards and empowers regulators like NAICOM to act more decisively in enforcing compliance, enhancing solvency, and ensuring the industry serves its role in risk protection and national development.”
Under the new Act, insurance companies will face stricter solvency and capital adequacy requirements, while the National Insurance Commission (NAICOM) is granted expanded powers to supervise market conduct, issue penalties, and accelerate recapitalisation efforts.
The law also includes provisions for digital innovation in underwriting and claims management, paving the way for stronger insurtech growth and better customer service delivery.
Industry stakeholders have hailed the reform as a long-overdue breakthrough. The Nigerian insurance industry has historically lagged behind, contributing less than 1% to GDP and facing persistent challenges around public trust, low awareness, and limited coverage. With the reforms, operators expect improved investor confidence, product innovation, and better claims settlement processes.
“This is a turning point for the insurance sector,” said a top official of the Nigerian Insurers Association. “It gives us the structure and confidence to support the economic agenda of this administration and contribute meaningfully to Nigeria’s $1 trillion economy goal.”
The Insurance Reform Act is also expected to drive increased participation in microinsurance, agricultural insurance, and compulsory coverages, particularly in the public and informal sectors. Analysts say that with proper implementation, the reforms could double insurance penetration within five years and mobilise significant domestic capital for infrastructure, health, and disaster risk financing.
President Tinubu’s assent to the Act follows recent reforms in pensions, capital markets, and tax administration—all targeted at building a more inclusive, resilient, and investor-friendly economy.
With the legal framework now in place, attention shifts to NAICOM, operators, and other stakeholders to translate the Act’s provisions into measurable industry transformation.
