President Bola Ahmed Tinubu has signed the Nigerian Insurance Industry Reform Act 2025 into law, marking the most comprehensive overhaul of Nigeria’s insurance regulatory framework in over two decades.

The new law repeals the Insurance Act of 2003 and consolidates several outdated legislations into a modern, unified legal framework aimed at driving innovation, transparency, and global competitiveness in the sector.

In a statement on Tuesday, presidential spokesperson Bayo Onanuga said the legislation empowers the National Insurance Commission to provide robust regulation and supervision of all insurance and reinsurance activities in the country.

According to Onanuga, the law introduces critical reforms aligned with the Tinubu administration’s Renewed Hope agenda and long-term goal of building a $1 trillion economy by 2030.

Key provisions include stricter capital requirements to ensure financial stability, enforcement of compulsory insurance policies, and the digitisation of insurance services to expand access and operational efficiency.

The law also mandates swift claims settlement, establishes policyholder protection funds to safeguard consumers in the event of insolvency, and encourages regional cooperation through schemes like the ECOWAS Brown Card System.

The reform is expected to attract new investments, increase insurance penetration, and boost consumer confidence in Nigeria’s underdeveloped insurance market.

Industry analysts have long criticised the 2003 Act as outdated and ineffective, noting that many of its penalties—such as fines of N2 or N5, or in obsolete foreign currencies—undermined enforcement and regulatory deterrence.

The old Act was also widely criticised for its weak consumer protection mechanisms and ineffective dispute resolution, with the Complaints Bureau proving inadequate in addressing insurance-related grievances.

Additionally, industry stakeholders and lawmakers had long called for reforms such as the adoption of risk-based supervision, modernised capital adequacy standards, stricter sanctions for violations, and the consolidation of related statutes, including the Marine Insurance Act and the Third Party Road Accident Act.