NIIRA 2025: NAICOM Calls for Legislative Backing to Anchor Nigeria’s $1tr Economy
By Patience Ikpeme
The National Insurance Commission (NAICOM) has made an impassioned plea to the House of Representatives Committee on Insurance and Actuarial Matters for collaborative support to ensure the full realization of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The call was made by the Commissioner for Insurance (CFI) Mr. Olusegun Ayo Omosehin during the 2025 Stakeholders’ Retreat of the House of Representatives Committee on Insurance and Actuarial Matters in Maiduguri, Borno State.
The CFI stated that NIIRA 2025 is not merely an update to old rules, but a transformative legislation designed to elevate the insurance sector into a pillar of Nigeria’s economic stability. The new Act consolidates decades of fragmented laws into a single, modern framework, aligning with international best practices and paving the way for the sector to contribute significantly to the Federal Government’s $1 trillion economic ambition.
A cornerstone of the reform is a stronger focus on consumer protection. The new law mandates better disclosure and claim handling practices, and, crucially, establishes a Policyholder Protection Fund. This fund will serve as a vital financial safety net, guaranteeing the payment of valid claims even if an insurer faces insolvency, thereby protecting policyholders from financial loss and boosting public trust, which has long been a challenge for the industry.
The Act also tackles non-compliance with compulsory insurance, introducing stronger enforcement mechanisms and clearer penalties. A significant new provision is the mandatory insurance coverage for all government assets and employees.
This step is projected to reduce the government’s reliance on emergency expenditures by up to 40% following disasters, allowing public resources to be redirected towards priorities like education and health.
Highlighting the strategic importance of the sector, the CFI emphasized that insurance is a powerful tool to de-risk agriculture, a sector highly vulnerable to climate shocks like floods and drought, which cost Nigeria billions annually. Under NIIRA 2025, NAICOM plans to: expand index-based and parametric insurance for crops and livestock; promote bundled insurance products with farm inputs and credits; and partner with tech firms and agribusinesses to scale digital insurance delivery.
The push for agricultural insurance is underpinned by positive impact statistics: according to Omosehin, over 1.47 million smallholder farmers are already covered, with a target of 3.6 million by 2026. Furthermore, insured rice farmers in North Central Nigeria reported 11% higher productivity compared to their uninsured counterparts.
The new Act also aims to strengthen the financial stability of insurers through stricter capital and solvency rules, which will in turn enable insurers to mobilize long-term capital to fund infrastructure bonds, housing, and industrial growth.
The new legislation Omosehin said pushes for digitalization to enhance market access, transparency, and trust. Digital distribution provides a framework for mobile solutions to eliminate geographical barriers and reduce transaction costs.
Crucially, the Act includes provisions for Microinsurance and Takaful to ensure financial inclusion for all Nigerians. Microinsurance offers simplified, affordable products for low-income individuals, while Takaful provides a Shariah-compliant alternative based on mutual protection, expanding access for religiously sensitive populations.
The CFI concluded his remarks by urging the legislators to view the new law as a starting point. He called on the House Committee to use its legislative powers to: exercise oversight to guarantee that MDAs comply with compulsory insurance; provide budgetary support for NAICOM’s initiatives; drive public awareness and advocacy in their constituencies; and facilitate the harmonization of state policies with the new federal framework to ensure uniform application of the law.
Without the legislative arm’s backing, the CFI warned that, “compliance will remain weak, and the promise of this law may not be realised”.
