Follow Us on Google
By Henry Uche
Aside from poverty and poor insurance education, another factor that has scared Nigerians away from procuring insurance is the fear that contracts are intentionally designed like booby traps to lock in policyholders as preys for the insurers.
For many, the contracts are long, the words too heavy and the clauses hidden like traps. Most policyholders only discovered the fine print when they needed help and by then, the companies had an excuse not to pay.
From Lagos to Kano, the story has been the same.
“Almost every insurance company uses strange words that ordinary people can’t understand. “When a claim arises, they suddenly point out conditions you never noticed. In the end, you’re blamed and they walk away without paying”, a policyholder told Daily Sun.
This bad reputation has stuck om the insurance sector for decades and it is no surprise that many Nigerians still see insurance as a gamble they can never win. Analysts have long argued that an industry built on “trust” cannot survive if the very people it serves feel tricked.
Flickers of hope on the horizon
At the annual conference of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, the Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, assured Nigerians that the era of complex insurance documents is over.
According to him, the new Nigerian Insurance Industry Reform Act (NIIRA) 2025 has one clear message: keep it simple.
“The new law compels insurance companies to write policies in simple and clear terms,” Omosehin declared.
Represented by Dr. Tamis Usman, NAICOM’s Director of Legal, Enforcement, and Market Development, he explained further: “Before a policy begins, the customer must receive a document that clearly states the terms of the contract. Anyone should be able to read and understand it without confusion.”
Reform more than consumer protection
Experts say plain language will build public confidence, attract more people into insurance and drive growth in the sector. By removing the fog of jargon, the industry could finally win back trust and deepen its role in economic development.
Still, the law is only the first step. Consumers, too, must play their part, by reading documents carefully, demanding clarification, and refusing to sign what they do not understand.
Analysts say that for once, Nigerians can hope for an insurance industry that protects them, not one that hides behind fine print.
If NIIRA 2025 is followed in spirit and not just in letter, insurance may finally become what it was always meant to be: a safety net, not a snare.
The Commissioner added: “The law also provides that before the commencement of your policy, you must issue a policy document which contains the terms of the contract. This was not captured in the previous legal instruments. The law says the policy document must be in ‘simple and clear terms that anybody can see, read, and understand.’ This alone will build trust and boost public confidence in the insurance sector.”
With this new order, it is expected that policy documents, henceforth, must be presented in simple and clear terms, with respect to language use and choice of words, so that they are easily understood by both the learned and the unlettered. The aim is to increase public confidence and trust in the insurance sector. It would also foster growth and improve consumer protection by ensuring policyholders, including those without extensive literacy or specialized knowledge, can fully comprehend their rights and responsibilities.
In support of NIIRA 2025, industry doyens have added their voices, saying that such an order is crucial for insurance consumer protection. Besides, it aligns with international best practices, making insurance business more efficient, transparent, and customer-centric.
Meanwhile, Nigerians have been advised by insurance enthusiasts to pay closer attention to ‘terms and conditions’ when engaging in any form of business, not only in insurance. Insurance commentators in different fora have suggested that, should an insurance policy document be written in confusing, technical, or legal jargon, customers should not hesitate to demand explanations and clarifications.
“Even without NIIRA spelling it out, commonsensically, terms and conditions should be clear and simple language that anyone (ordinary person, not just people with legal or insurance knowledge) can see, read and understand. Insurance companies shouldn’t hide things or use complicated words to trick people or make things difficult to follow. This is important so that one can know whether one is to hold himself or herself responsible for lack of knowledge and understanding. This would prevent misunderstandings and disputes later, and when this is seen in reality, it would boost trust and confidence,” they stressed.
