The House of Representatives has endorsed a comprehensive insurance reform bill designed to revamp the nation’s insurance sector. Pending review by the Senate and the President, the legislation introduces a mandatory minimum capital requirement for insurers operating under the Supervised Welfare Trust (SWT) framework.
The bill, when signed into law, will repeal the Insurance Act 2004, the Marine Insurance Act, 2004, the Motor Vehicle (third party insurance) Act 2004, the National Insurance Corporation of Nigeria Act, 2004 and the Nigeria Reinsurance Corporation Act 2004.
Lawmakers stress that this measure is vital to ensure companies maintain sufficient financial reserves to cover claims and absorb unforeseen losses, thereby lowering insolvency risks and enhancing consumer protection.
According to representatives, aligning Nigeria’s insurance practices with international standards will foster greater market stability and boost investor confidence. Supporters argue that the reform addresses long-standing challenges in the industry, including weak regulatory oversight and inconsistent consumer safeguards.
However, some industry experts have expressed concerns that the higher capital requirements might disadvantage smaller insurers, potentially curtailing competition and reducing market diversity. Despite these reservations, the bill is widely viewed as a pivotal step toward establishing a more resilient and transparent insurance sector.
In addition to the capital mandate, the reform bill proposes stricter enforcement measures and harsher penalties for regulatory breaches.
Lawmakers remain optimistic that these changes will modernize the industry while promoting a fairer, more competitive marketplace—ultimately benefiting policyholders and strengthening Nigeria’s financial services landscape.
