Achieving Sector Overhaul Through 2024 Consolidated Insurance Reform Bill

Jeremiah Said, a motivational speaker, once observed that, “getting insurance is your responsibility to your family and loved ones. You may hate it but it is your responsibility.”
Experts said insurance embodies preparedness, offering a safety net when life takes an unexpected turn.
They opined that an insurance policy can be the difference between rebuilding a life and succumbing to despair.
Analysts also observed that for the average Nigerian, insurance is not just about protection; it is also about resilience and ensuring that when disasters strike, there is a mechanism to recover losses, manage unexpected costs, and stabilise one’s life and family.
They argued that rebuilding homes or businesses from crisis like the recurrent floods will seem insurmountable without insurance.
Experts, however, emphasised the need for a stronger regulatory framework to enable insurance companies fulfill their obligations to their customers when the need arises.
This, they say, can be spurred through the passage and implementation of the 2024 Consolidated Insurance Reform Bill.
The bill, which was recently passed by the Senate, was described by analysts as a game changer in the insurance industry.
They said that after it had been assented to by President Bola Tinubu, the bill would stimulate growth, increase competition, and improve the overall efficiency of the industry.
The bill specifies N10 billion for life insurance firms, N15 billion for non-life business and N35 billion for reinsurance companies in the country.
It seeks to regulate the insurance business in Nigeria by consolidating various existing legislations.
The legislations include the Insurance Act, 2003; the Marine Insurance Act; Motor Vehicles (Third Party Insurance) Act; the National Insurance Corporation of Nigeria Act; and the Nigeria Reinsurance Corporation Act.
Stakeholders believe that it will help to increase confidence in the industry, attract new investments, and ultimately lead to better services for policyholders.
Sen. Adetokunbo Abiru, Chairman, Senate Committee on Banking, Insurance and other Financial Matters, said that the bill sought to consolidate various existing laws regulating insurance businesses in the country.
Abiru, who is also the sponsor of the bill, said that its major objective was to create a robust legal and regulatory framework for the insurance sector, enabling it to contribute positively to Nigeria’s financial landscape.
He emphasised the need for effective risk-based supervision in the insurance sector, arguing that the current rule-based regulatory system had become obsolete.
“The current insurance legislation is over two decades old and lacks provisions to address contemporary challenges and foster growth and innovation,” he said.
Sen. Barau Jibrin, Deputy President of the Senate, said that the passage of the bill was necessary to align the insurance ecosystem with contemporary economic realities, which will ultimately benefit the country.
“This law, once it receives concurrence from the House of Representatives and assent from the President, will significantly contribute to shaping our economy for the better.
“Economies are dynamic and constantly changing, and it is incumbent upon the authorities of every nation to update their legislation to align with contemporary realities.
“This is precisely what the passage of this legislation aims to achieve to restructure the entire insurance ecosystem in line with current realities,” he said..
The National Insurance Commission (NAICOM), through its Commissioner for Insurance, Mr Olusegun Omosehin, said that the passage of the new insurance bill would positively impact the contributions of the sector to the country’s Gross Domestic Product (GDP).
Omosehin said that the legislation would unlock the growth, prosperity, and potentials of the insurance sector.
He highlighted some provisions of the bill to include enhanced capital requirements which will ensure that insurance companies are adequately capitalised to underwrite risks and protect policyholders.
Others provisions are risk-based supervision, strengthened consumer protection to safeguard the interests of policyholders, and promoting transparency and fairness in insurance practices and streamlined regulatory framework.
According to him, the passage of the bill has marked a significant milestone in the country’s efforts to revamp the insurance industry after nearly two decades.
“The bill provides a comprehensive framework for regulating all types of insurance businesses and ensuring a more robust and effective industry.
“The bill marks a significant triumph for Nigeria’s insurance industry, tackling the long-standing challenge of low insurance penetration in the country.
“The new legislation addresses the industry’s need for a more robust legal and regulatory framework, enabling it to compete favourably in the African insurance market and globally,” he said.
Yetunde Ilori, the President of the Chartered Insurance Institute of Nigeria (CIIN), expressed optimism that the bill would scale through the presidential assent with ease and become a law.
According to Ilori, operators, brokers, and all other arms of the sector are working with NAICOM to ensure smooth passage of the bill into law as soon as possible.
Dr Sam Onyeka, the Lead Director, of Transparent Protection Limited/GTE, an insurance non- governmental organisation, hailed the passage of the bill by the Senate.
Onyeka said that the bill would help the industry to meet international best practices.
Dr John Idoko, an insurance expert said that the bill was revolutionary for the insurance industry.
“It will help to level the playing field, increase competition, and drive growth.
“We are excited about the prospects for the industry and the benefits that this bill will bring to policyholders,” he said.
Mrs Catherine Itoha, a civil servant, appealed to NAICOM to ensure that insurance companies met their obligations to customers in claims settlement when the need arose.
In spite of the all the positive headwinds of the bill, observers say it will force some insurance companies, especially those who cannot afford the minimum capital requirement, out of business.
Experts opined that there are tendencies that insurance companies will increase insurance premium paid by policyholders.
They urged the regulator to ensure that insurance companies cut down on the time it takes to pay customers who are victims of crisis, as doing this will reduce the mental trauma associated with the losses.
Stakeholders also advise NAICOM to devise strict regulatory framework for effective monitoring and enforcement to ensure that claims of policyholders are paid by insurance companies when due.
As the bill awaits presidential assent, industry experts are optimistic about its potential impact to the country’s insurance sector.
However, analysts said the time for the implementation of the Bill is now to enable the country meet up with trends in the sector.NAN