On Thursday, the Senate passed the second reading of the Nigeria Insurance Industry Reform Bill, 2024 (SB 393), which was sponsored by 41 senators including the chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru of FCA (Lagos East).
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During his lead discussion, Senator Abiru spoke to the Senate about the broad concepts of the measure, which aims to give Nigerian insurance industry a complete legislative framework for regulation and supervision. Speaking on the bill, Senator Abiru bemoaned the poor uptake of insurance services in Nigeria, despite the fact that this is one of the country’s oldest financial services sectors.
With a penetration rate of 0.5%, he ranked 5th in Africa and 70th overall. “With its (Nigeria’s) young and vibrant population and growing GDP, the potential for exponential growth is undeniable,” asserted Abiru, a distinguished economist and accountant who retired as a bank chief executive. But in order to seize the chances and support national economic expansion, the sector needs to change if it is to prosper in the ensuing ten years.
According to Senator Abiru, the laws that currently govern the operations of different insurance companies, such as the Insurance Act of 2003, the Marine Insurance Act, the Motor Vehicles (Third Party Insurance) Act, the National Insurance Corporation of Nigeria Act, and the Nigeria Reinsurance Corporation Act, have become antiquated and ineffectual due to the innovations and changes that have recently occurred in the insurance industry.
He outlined the precise goals of the measure as well as its overall advantages for the economy and Nigerians. The bill unifies a number of current laws that govern how insurance companies operate in Nigeria, including the Nigeria Reinsurance Corporation Act, the Motor Vehicles (Third Party Insurance) Act, the Insurance Act of 2003, and the Marine Insurance Act. In order to ensure that the insurance industry positively contributes to the Financial System Strategy’s main goal of making Nigeria a financial hub in Africa and one of the world’s twenty (20) largest economies, the bill aims to establish a strong legal and regulatory framework.
It also aims to evolve effective risk-based supervision within the regulatory system, replacing the rule-based supervision that was previously made possible by current laws. All of the senators praised the measure’s provisions and Senator Abiru for introducing the important, well-researched law that will completely transform Nigeria’s insurance industry.
