The Nigerian Insurance Industry Reform Act (NIIRA) 2025 has officially become law, introducing a major change for the country’s insurance sector. Signed by President Bola Tinubu, the new legislation now requires that all online insurance businesses obtain a valid license from the National Insurance Commission (NAICOM) to operate legally in Nigeria.
Licensing Is Now Mandatory for Online Insurers
Under Section 201 of the new Act, it is now illegal for any individual or company to start or run an online insurance business without a license from the Commission. This provision specifically targets web, internet, and other electronic-based insurance platforms, giving NAICOM the authority to issue regulations and impose sanctions for non-compliance. The law makes it clear: if you are providing insurance services online, you must be licensed.
New Measures Against Financial Crimes
The NIIRA 2025 also strengthens the insurance industry’s role in combating financial crimes. All insurance institutions are now required to adopt strict policies to comply with international and local laws regarding:
- Know Your Customer (KYC)
- Anti-Money Laundering (AML)
- Combating Financing of Terrorism (CFT)
- Combating Financing of Proliferation of Weapons of Mass Destruction (CPF)
Insurance companies must implement internal controls to prevent transactions related to the proliferation of weapons of mass destruction. NAICOM is empowered to collaborate with international bodies to share information and data to aid in these efforts.
Stiff Penalties for Non-Compliance
The new law introduces significant penalties for anyone found operating an unlicensed insurance business:
- Individuals face a fine of N25 million.
- Companies face a penalty of N50 million.
- In addition, the principal officers of a non-compliant company could face a fine of N50 million each and a potential prison sentence of up to two years.
This legislation is part of a broader reform aimed at modernizing Nigeria’s insurance sector, with goals that include strengthening capital requirements, enforcing compulsory insurance, and promoting digitization to help drive the country’s economic growth. The NIIRA 2025 repeals and consolidates several older insurance laws, creating a single, comprehensive framework for regulating the industry.
