Nigeria Insurance Industry Reform Act 2025: What Buyers Should Know

The Nigeria Insurance Industry Reform Act 2025 (NIIRA 2025) is the law that now governs how every insurer, reinsurer and broker operates in Nigeria. President Bola Ahmed Tinubu signed it on 31 July 2025. This article explains what the Act changed, how the recent recapitalisation exercise affects the insurers your business relies on, and the specific obligations company owners, finance leaders and HR managers should act on.

 

Key facts about Nigeria Insurance Industry Reform Act 2025:

• NIIRA 2025 was signed into law on 31 July 2025 and replaced the Insurance Act 2003 and the National Insurance Commission Act 1997.
• New minimum capital: life ₦10 billion, non-life ₦15 billion, composite ₦25 billion, reinsurance ₦35 billion.
• NAICOM verified 43 insurers and reinsurers as recapitalised, holding a combined ₦715 billion in statutory capital, with 8 firms still under review.
• The Act tightens claims-settlement timelines, provides for a Policyholder Protection Fund, and widens compulsory insurance obligations for businesses.
• Action for buyers: confirm your insurer is on NAICOM’s verified list, review compulsory covers, and reassess sums insured.

 

What is the Nigeria Insurance Industry Reform Act 2025?

NIIRA 2025 is a single statute that replaced Nigeria’s fragmented insurance legislation. According to the National Insurance Commission (NAICOM), the Act repealed and consolidated earlier laws, including the Insurance Act 2003 and the National Insurance Commission Act 1997. It gives NAICOM stronger powers to license operators, supervise the market, and sanction firms that breach the rules.

The reform has three practical aims for buyers. It raises the financial strength of insurers so claims can be paid. It tightens claims-settlement discipline. It widens the scope of compulsory cover that businesses must have. Each of these points is covered below.

 

How did NIIRA 2025 change insurer capital requirements?

NIIRA 2025 raised the minimum capital that insurers and reinsurers must hold, and it changed how that capital is measured. NAICOM now assesses minimum capital as the excess of admissible assets over liabilities, not reported paid-up capital. Firms must meet the fixed floor for their category or a risk-based capital calculation, whichever is higher.

The category floors under NIIRA 2025 are:

Insurer category	Minimum capital under NIIRA 2025
Life insurance	₦10 billion
Non-life (general) insurance	₦15 billion
Composite insurance	₦25 billion
Reinsurance	₦35 billion

Composite insurers must satisfy the requirement for each business line they operate, which is why the composite floor equals the life and non-life floors combined. NAICOM confirmed these thresholds in its NIIRA 2025 recapitalisation circular.

 

What did the 2026 recapitalisation exercise confirm?

NAICOM closed the twelve-month recapitalisation exercise on 31 July 2026 and announced the results in early August 2026. The Commission verified that 43 companies met the new minimum capital: 23 non-life insurers, 10 life insurers, 8 composite insurers, and 2 reinsurers. A further eight firms submitted evidence near the deadline out of which seven (7) of them was cleared as of August 14, 2026.

The verified operators hold a combined statutory capital floor of ₦810 billion. That figure reconciles with the category counts: 28 non-life firms at ₦15 billion, 12 life firms at ₦10 billion, 8 composite firms at ₦25 billion, and 2 reinsurers at ₦35 billion. NAICOM reported that the exercise drew more than ₦300 billion in fresh capital into the sector. Commissioner for Insurance Olusegun Ayo Omosehin described the outcome as the start of a stronger, better-capitalised market.

The consequence for buyers is direct. Insurers that failed to meet the requirement face merger, liquidation, or other regulatory resolution. The market that remains is smaller and better funded.

 

How can your business confirm its insurer met NIIRA 2025?

An insurance broker performs this check as part of placing cover. Because a broker is not tied to one carrier, it can move a client’s programme to a verified insurer where a current carrier has not met the requirement.

 

What does NIIRA 2025 change for claims and policyholders?

NIIRA 2025 strengthens policyholder protection in two ways. It sets stricter timelines for settling valid claims and provides for penalties against insurers that delay legitimate payments. It also provides for a Policyholder Protection Fund, a mechanism intended to support policyholders where an insurer becomes insolvent.

These provisions raise the enforcement standard, but they do not remove the buyer’s responsibility to document and present claims correctly. Accurate records, correct sums insured, and prompt notification remain the conditions for a fast settlement.

 

Which compulsory insurances apply to Nigerian businesses under NIIRA 2025?

NIIRA 2025 retains and extends the classes of insurance that are compulsory in Nigeria. Published legal analyses of the Act identify the following obligations and reported penalties for default. Businesses should confirm the current figures with a licensed broker or NAICOM before relying on them.

• Group life assurance: Mandatory for every employer, with a benefit of at least three times each employee’s annual emolument. Reported penalty for default is ₦250,000 per employee. This aligns the requirement with the Pension Reform Act. See our guide to group life insurance.
• Buildings under construction: Required for structures above one floor, with a reported penalty of ₦5 million or twelve months imprisonment.
• Occupiers’ liability (public buildings): Cover for public buildings is retained, with a reported penalty of ₦1 million or twelve months imprisonment.
• Petroleum and gas facilities: Third-party liability cover is required, with a reported penalty of ₦1 million or two years imprisonment.
• Credit life: Required for loans above ₦10 million.
• Imported goods: Importers must insure eligible imports with Nigerian-licensed insurers.

A full compulsory-cover review sits within the broader set of types of insurance in Nigeria that a corporate buyer should hold.

 

What should Nigerian businesses do now?

Three actions follow from NIIRA 2025. Confirm that every insurer on your programme appears on NAICOM’s verified list. Review your compulsory covers against the classes above, with particular attention to group life and any construction or petroleum exposure. Reassess sums insured, because a better-capitalised market prices risk more accurately and underinsurance is exposed at claim stage.

A NAICOM-licensed broker completes these steps as standard practice and documents the outcome. YOA Insurance Brokers is ISO 9001:2015 certified and NAICOM licensed, and advises corporate clients across energy, real estate, healthcare, and employee benefits.

 

Review your cover against NIIRA 2025 with YOA

NIIRA 2025 changed the standard for insurer solvency, claims, and compulsory cover. Confirming that your programme meets a specific, time-bound task. YOA Insurance Brokers reviews your current insurers against NAICOM’s verified list, checks your compulsory covers, and reassesses your sums insured.

Book a free risk advisory session with YOA’s team, or contact us to have your business insurance programme reviewed against NIIRA 2025.

 

Conclusion

The Nigeria Insurance Industry Reform Act 2025 raised insurer capital floors, confirmed 43 verified operators holding ₦715 billion in statutory capital, tightened claims rules, and widened compulsory cover. For businesses, the practical effect is that carrier solvency and compliance now carry measurable consequences. Confirming insurer status and reviewing compulsory covers with a licensed broker is the appropriate response to the new framework.