President Bola Ahmed Tinubu has signed the Nigerian Insurance Industry Reform Act (NIIRA) 2025 into law, introducing sweeping reforms to modernize the insurance sector and strengthen regulatory oversight.

Under Section 201 of the Act, any person or entity running an insurance business online — including via websites, apps, or other electronic platforms — must obtain a license from the National Insurance Commission (NAICOM) before operating in Nigeria.

The section reads:

“A person shall not commence or carry on web, internet, or electronic-based insurance or related business unless licensed by the Commission.”

NAICOM has also been empowered to impose administrative sanctions on operators who fail to comply. The Commission will issue specific regulations from time to time for internet-based insurance businesses.

Terrorism Financing and Money Laundering Safeguards
The Act places strict obligations on all insurance institutions to adopt and enforce policies in line with:

  • Know Your Customer (KYC)
  • Anti-Money Laundering (AML)
  • Combating Financing of Terrorism (CFT)
  • Combating Financing of Proliferation of Weapons of Mass Destruction (CPF)

These measures aim to align the Nigerian insurance sector with both local and international standards. The law also mandates internal control systems to block transactions linked to terrorism or proliferation financing.

The Commission will work with global counterparts to exchange intelligence and data in the fight against financial crimes.

Heavy Penalties for Non-Compliance
Operating an unlicensed insurance business now attracts a fine of ₦25 million for individuals. For companies, the penalty doubles, with principal officers facing ₦50 million fines each and up to two years’ imprisonment.

A Comprehensive Overhaul
The NIIRA 2025 repeals and consolidates multiple outdated insurance laws into a single, modern legal framework. Beyond online licensing, the Act introduces:

  • Higher capital requirements for insurers
  • Stricter enforcement of compulsory insurance
  • Digitization mandates to boost efficiency and transparency

The reforms are part of Tinubu’s broader economic strategy, which targets building a $1 trillion economy and enhancing investor confidence in Nigeria’s financial services sector.

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