The Nigerian Senate has passed the 2024 Nigerian Insurance Industry Reform Bill. This followed the adoption of the report from the Committee on Banking, Insurance, and Other Financial Institutions at plenary on Tuesday. The report was presented by the Chairman of the Committee, Senator Abiru Adetokunbo (APC-Lagos).
Senator Adetokunbo, while presenting the report, noted that the bill was read the second time on July 18.
He said the bill aimed to consolidate various existing legislations regulating insurance businesses in Nigeria, including the Insurance Act 2003, the Marine Insurance Act, the Motor Vehicles Third Party Insurance Act, the National Insurance Corporation Act, and the Nigerian Reinsurance Corporation Act.
One of the major objectives of the bill, he said, was to ensure a better future for Nigeria and establish a robust legal and regulatory framework that would enable the insurance sector to positively contribute to financial assistance practices.
He stressed that for Nigeria to become Africa’s financial hub and one of the 20 largest economies in the world, there was a need for effective risk-based supervision in the regulatory system.
Senator Adetokunbo added that the existing rule-based supervision, facilitated by the current laws in the insurance sector, had become outdated.
He noted that during the public hearing, stakeholders made significant presentations in support of the bill’s passage, and there was consensus that the laws regulating the industry were obsolete.
He further explained that there was a need to enhance the industry’s potential to compete globally, as the current insurance legislation did not meet the evolving needs of the Nigerian insurance industry.
“All these legislations have surpassed a two-decade mark, and they lack provisions that can adequately address contemporary challenges and support growth and innovation within the industry,” he said.
He pointed out that legal obsolescence had led to regulatory inefficiencies in the industry, which had hindered its ability to successfully compete on a global level.
Senator Adetokunbo urged the Senate to pass the bill, highlighting that its passage would provide a comprehensive legal framework for the regulation and supervision of all insurance initiatives in Nigeria, helping the industry to compete globally.
Contributing, Senator Jimoh Ibrahim (APC-Ondo) raised concerns about the provision in the bill regarding minimum capital requirements for the reinsurance business, set at N45 billion, noting that this may not be feasible given the current economic situation.
He urged the Senate to consider maintaining the status quo on minimum capital requirements for reinsurance businesses in the interest of the industry.
However, Senator Ibrahim’s suggestion to revert to the previous capital requirement was not endorsed by the Senate during the clause-by-clause consideration.
Deputy President of the Senate, Senator Barau Jibrin (APC-Kano), who presided over the plenary, commended the committee for their excellent work following the passage of the bill.