The Nigerian Insurance Industry Reform Act (NIIRA) 2025 mandates that people running insurance businesses online must obtain a license from the National Insurance Commission to practice in Nigeria.
This is according to Section 201 of the Nigerian Insurance Industry Reform Bill, recently signed into law by President Bola Tinubu.
The Act stresses that the Commission shall have the power to impose administrative sanctions against insurance institutions for non-compliance with its provisions.
This section of the legislation affects all platforms that provide insurance services online.
Online Insurance Companies
The Act warns that online or electronic companies are prohibited from commencing operations unless licensed by the appropriate authority.
Section 201(1) reads, “A person shall not commence or carry on web, internet, or electronic-based insurance or related business unless licensed by the Commission.”
- The section also stresses that the Commission shall, from time to time, issue regulations for web, internet, or related electronic-based insurance businesses in Nigeria.
Insurers warned against Terrorism Financing
- The section following Section 201 states that all insurance institutions shall adopt policies reflecting their commitment to comply with the following:
- Know Your Customer (KYC)
- Anti-Money Laundering (AML)
- Combating Financing of Terrorism (CFT)
- Combating Financing of Proliferation of Weapons of Mass Destruction (CPF)
These are obligations under terrorism and existing international and local laws, regulations, and regulatory directives.
- Affected insurance companies are required to implement internal control measures to prevent any transactions related to the proliferation of weapons of mass destruction.
- The Commission is also empowered to make regulations, guidelines, and policies from time to time to fight against money laundering, combat the financing of terrorism, and the proliferation of weapons of mass destruction for insurance institutions, in line with international best practices and standards.
- The law states that the Commission shall liaise with relevant bodies in other countries with similar objectives for the purposes of sharing information and relevant data to aid the fight against money laundering and terrorism financing.
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.