Stakeholders unanimously agreed that the existing law had become obsolete and that the new legislation would provide a comprehensive legal framework for regulating and
By Mmesoma Onwuka
The Senate on Tuesday passed the Insurance Regulatory Commission (Establishment) Bill, 2026, repealing the 28-year-old National Insurance Commission (NAICOM) Act and introducing a new legal framework aimed at strengthening the regulation of Nigeria’s insurance industry.
The legislation, sponsored by the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Sen. Mukhail Abiru, and other lawmakers, is designed 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Presenting the committee’s report during plenary, Abiru said the National Insurance Commission Act of 1997 had become outdated and no longer reflected the realities of the evolving insurance industry.
He explained that the proposed law establishes a more independent regulator with wider supervisory and enforcement powers to address emerging challenges in the sector.
According to the law, the proposed Insurance Regulatory Commission will be empowered to intervene in financially distressed insurance companies, facilitate their orderly resolution, protect policyholders and safeguard the stability of the financial system.
The commission will also have the authority to collaborate and exchange information with local and international regulatory bodies, issue regulations, standards and directives to insurance operators and relevant government institutions, and take prompt regulatory action where necessary.
The legislation further introduces stricter enforcement measures, including higher fines, suspension of operating licences, additional liabilities for offenders and the disqualification of individuals found responsible for the collapse of insurance institutions from occupying positions within the industry.
In a move aimed at accelerating regulatory intervention, the bill removes the requirement for prior ministerial approval before the regulator can appoint or remove directors of failing or distressed insurance companies.
To improve corporate governance, the bill prescribes minimum professional qualifications and integrity standards for members of the commission’s governing board, ensuring that only individuals with expertise in insurance, finance, law, risk management and corporate governance are appointed.
It also empowers the Minister of Finance to constitute an Interim Management Committee within 30 days whenever the governing board’s tenure expires or is terminated.
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.
In addition, it grants legal protection to the commission and its officials against actions arising from the lawful discharge of their statutory responsibilities.
A major highlight of the reform is the renaming of the National Insurance Commission (NAICOM) as the Insurance Regulatory Commission, a change lawmakers said would better reflect the agency’s mandate and eliminate longstanding ambiguity.
Abiru disclosed that the committee subjected the bill to extensive legislative scrutiny, including a public hearing that received more than 50 memoranda and several oral submissions from stakeholders.
He said consultations were also held with key institutions, including the Federal Ministry of Finance, the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the Federal Mortgage Bank of Nigeria (FMBN), the Nigerian Insurers Association (NIA), the Nigerian Council of Registered Insurance Brokers (NCRIB), the Chartered Insurance Institute of Nigeria (CIIN) and other stakeholders before the report was finalised.
According to him, stakeholders unanimously agreed that the existing law had become obsolete and that the new legislation would provide a comprehensive legal framework for regulating and supervising Nigeria’s insurance industry in line with international standards.
Following a clause-by-clause consideration of the committee’s report in the Committee of the Whole, the Senate adopted the recommendations and passed the Insurance Regulatory Commission (Establishment) Bill, 2026.