The Nigerian Senate has passed the Insurance Reform Bill 2024, which raises the minimum capital base for insurance companies operating in the country to N45 billion.
Details of The Bill
The bill titled “the Nigerian Insurance Industry Reform Bill, 2024 (SB. 393)” consolidates various existing laws governing insurance in the country, including the Insurance Act (2003), Marine Insurance Act, Motor Vehicles (Third Party Insurance) Act, National Insurance Corporation of Nigeria Act, and Nigerian Reinsurance Corporation Act.
The insurance reform bill sponsored by Mukhail Abiru, chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, proposes ₦25 billion as the minimum capital requirement for non-life insurance companies, up from ₦3 billion; ₦15 billion for life insurance, up from ₦3 billion; and ₦45 billion for reinsurance businesses, up from ₦10 billion.
The bill seeks to modernize and consolidate Nigeria’s insurance laws to address contemporary challenges and foster growth within the industry.
The passage of the bill which was read for the third time on Tuesday follows a clause-by-clause consideration and a majority vote in favour by the lawmakers.
Speaking on the bill, senator Abiru said “The existing rule-based supervision framework enabled by the current laws has become outdated. To make Nigeria a financial hub for Africa and one of the 20 largest economies in the world, there is an urgent need to adopt effective risk-based supervision within the insurance regulatory system,”.
The bill will now be transmitted to the House of Representatives for concurrence, after which it will be transmitted to President Bola Tinubu for assent to become law. Once enacted, insurance companies across Nigeria will need to comply with the revised minimum capital requirements to continue operations.
