Unlicensed insurance agents across Nigeria are liable, upon conviction, to a six-month jail term.
This is according to the Nigerian Insurance Industry Reform Act (NIIRA) 2025, signed into law by President Bola Tinubu.
By the legislation, unlicensed insurance agents across Nigeria may be arraigned in court for prosecution, with penalties including a fine of N500,000.
What the law says about Unlicensed Insurance Agents
According to PART VI – INSURANCE INTERMEDIARIES, Section 37 (1) of the Insurance legislation, a person who transacts business as an insurance agent without having been licensed as required “commits an offence and is liable on conviction to a fine not exceeding N500,000.00 or to a term of imprisonment not exceeding 6 months or to both fine and imprisonment.”
“In addition to subsection (10) of this section, the court may make an order requiring the person to refund any sums collected by him, while so transacting the business, to the rightful owners or other entitled persons,” the legislation states.
- Furthermore, any insurer who deals with an insurance agent not licensed is liable to a penalty of a sum equal to five times the amount of premium collected in respect of the business transacted.
- Notwithstanding the provisions of any other law, the Act states that no person shall transact business in Nigeria as an insurance agent unless he is licensed under its provisions.
- The Act also prohibits ex-convicts from operating as insurance agents for any insurer.
Section (2) of the law states that a person shall not be licensed as an insurance agent unless:
- He possesses a minimum certificate of proficiency issued by the Chartered Insurance Institute of Nigeria.
- In the case of a corporate entity, at least one of the principal officers possesses a certificate of proficiency issued by the Institute, or
- He or she possesses experience/length of service of not less than 10 years in an underwriting firm; and
- Prior to the date of his appointment, he or she has not been convicted by a court or tribunal for an offence involving dishonesty or fraud by whatever name called.
- He or she has not, within the preceding five years to the date of application, become bankrupt or applied to take the benefit of the law for the relief of bankruptcy.
The law states further that if the Commission (National Insurance Commission) is satisfied that the applicant has met the requirements of this section and such other requirements as may be prescribed by the Commission in its Service Charter, it shall license the applicant as an insurance agent.
The Commission also has the power to reject the application of any applicant, with the applicant having the option to appeal to the Commission’s board.
What you should know
The legislation also recommends a penalty of N25 million for individuals found operating unlicensed insurance businesses in the country, as previously reported by Nairametrics.
For companies or firms found guilty of the same offense, the penalty doubles, with principal officers of the organization facing fines of N50 million each, alongside the possibility of a two-year prison sentence.
Nairametrics previously reported that President Bola Ahmed Tinubu assented to the Nigerian Insurance Industry Reform Bill, 2025, a transformative piece of legislation aimed at modernizing Nigeria’s insurance sector and accelerating the country’s journey toward a $1 trillion economy.
The Act introduces sweeping reforms, including stringent capital requirements, compulsory insurance enforcement, and digitization mandates.
The Nigerian Insurance Industry Reform Act (NIIRA) 2025 is said to have repealed and consolidated several outdated insurance laws into a single, modern legal framework.
The new Act provides for comprehensive regulation and supervision of all insurance and reinsurance businesses operating within Nigeria.
The Act introduces critical measures such as:
- Stringent capital requirements to ensure the financial soundness of operators.
- Enforcement of compulsory insurance policies to enhance consumer protection
- Digitisation of the insurance market to improve access and efficiency;
- Zero tolerance for delays in claims settlement;
- Creation of dedicated policyholder protection funds, especially in cases of insolvency;
- Expanded participation in regional insurance schemes, including the ECOWAS Brown Card System.
The National Insurance Commission (NAICOM) was mandated by the President to administer and implement the provisions of the NIIRA 2025 in a manner that unlocks the industry’s full potential and significantly improves insurance penetration across the country.