The Senate has repealed the nearly 30-year-old National Insurance Commission Act of 1997, saying the law had become outdated and was no longer sufficient to regulate Nigeria’s evolving insurance industry.

To address gaps in the existing legislation, lawmakers on Tuesday passed the Insurance Regulatory Commission Bill, 2025, which seeks to establish a modern legal framework for supervising the insurance sector, strengthen regulatory oversight and bring Nigeria’s insurance industry in line with global best practices.

The bill, which passed its third reading after the Senate adopted the report of the Committee on Banking, Insurance and Other Financial Institutions, will repeal and replace the existing NAICOM Act if it is approved by the House of Representatives and assented to by President Bola Tinubu.

Under the proposed legislation, the National Insurance Commission will be renamed the Insurance Regulatory Commission, with the regulator granted broader powers to supervise operators, enforce compliance and impose tougher penalties for regulatory violations.

Presenting the committee’s report, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Tokunbo Abiru, said the existing insurance law no longer reflected the realities of Nigeria’s evolving insurance market.

Abiru said the committee had conducted extensive consultations before recommending the bill for passage, including holding a public hearing and reviewing more than 50 memoranda submitted by stakeholders across the insurance industry.

According to him, the proposed legislation seeks to strengthen the independence of the insurance regulator by granting it greater authority to perform its functions without undue interference.

He said the commission would be empowered to issue regulations, collaborate with local and international regulatory bodies, and intervene in distressed insurance companies to protect policyholders and safeguard financial stability.

Abiru added that the bill introduces stricter corporate governance standards by setting professional qualification and fit-and-proper requirements for members of the commission’s governing board.

He said the proposed legislation also provides tougher sanctions for regulatory breaches, including higher fines, licence suspensions, additional liabilities and the disqualification of individuals found responsible for regulatory failures.

Explaining the proposed name change, Abiru said renaming the National Insurance Commission as the Insurance Regulatory Commission would eliminate ambiguity and better reflect the institution’s expanded regulatory mandate.