Follow Us on Google
•Grants commission wider powers over distressed firms
•Prescribes tougher sanctions for erring insurance operators
From Adesuwa Tsan, Abuja
The Senate has repealed the 28-year-old National Insurance Commission (NAICOM) Act and replaced it with a new legal framework designed to strengthen regulation of Nigeria’s insurance industry, expand the regulator’s intervention powers over distressed firms and impose stiffer sanctions on erring operators.
The bill, the Insurance Regulatory Commission Bill, 2026, sponsored by the chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Mukhail Abiru and members, seeks to modernise insurance regulation in line with global best practices, while enhancing consumer protection, financial stability and the competitiveness of the sector.
Presenting the committee’s report before its consideration in the Committee of the Whole, Abiru said the National Insurance Commission Act of 1997 had become obsolete and no longer reflected the realities of the evolving insurance industry.
He said the legislation establishes a more independent regulator with expanded supervisory and enforcement powers to respond effectively to emerging challenges in the sector.
Under the new law, the Insurance Regulatory Commission will have enhanced authority to intervene in financially distressed insurance companies, facilitate their orderly resolution, protect policyholders and safeguard financial stability.
The commission is also empowered to exchange information and collaborate with domestic and international regulatory authorities, issue regulations, standards and directives to insurance operators and relevant government institutions and take timely regulatory actions where necessary.
Also, the bill introduces tougher enforcement measures, including increased fines, suspension of operating licences, additional liabilities for violators and the disqualification of individuals found responsible for the failure of insurance institutions from holding positions in the industry.
It also removes the requirement for prior ministerial approval before the regulator can appoint or remove directors of failing or distressed insurance companies, enabling quicker intervention to prevent systemic risks.
To strengthen corporate governance, the legislation prescribes minimum professional qualifications and integrity requirements for members of the commission’s governing board, ensuring that only persons with expertise in insurance, finance, risk management, law and corporate governance are appointed.
The bill further empowers the Minister of Finance to constitute an Interim Management Committee within 30 days where the governing board’s tenure expires or is terminated.
In addition, the legislation expands the statutory objectives of the commission to include the effective administration, supervision, regulation, control, integrity and development of insurance business in Nigeria.
It also provides legal protection for the commission and its officials against actions arising from the lawful discharge of their statutory responsibilities.
A key feature of the reform is the change of the regulator’s name from the National Insurance Commission (NAICOM) to the Insurance Regulatory Commission, a move the committee said would better reflect its mandate and eliminate longstanding ambiguity.
Abiru said the committee subjected the bill to extensive legislative scrutiny, including a public hearing that attracted more than 50 memoranda and numerous oral submissions from stakeholders.
He added that the committee also consulted widely with the Federal Ministry of Finance, the Central Bank of Nigeria, the Nigeria Deposit Insurance Corporation, the Securities and Exchange Commission, the Federal Mortgage Bank of Nigeria, the Nigerian Insurers Association, the Nigerian Council of Registered Insurance Brokers, the Chartered Insurance Institute of Nigeria and other stakeholders before finalising its report.
According to him, stakeholders unanimously agreed that the existing law had become outdated and that the new legislation would provide a comprehensive legal framework for regulating and supervising insurance business in Nigeria in line with international standards.
Following the clause-by-clause consideration of the committee’s report, the Senate adopted the recommendations and passed the Insurance Regulatory Commission (Establishment) Bill, 2026.
