The Senate has passed the Nigeria Insurance Industry Reform Bill 2024 for a second reading, to modernise and boost the insurance sector.
The Nigeria Insurance Industry Reform Bill, 2024 (SB 393), sponsored by the Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru, alongside 41 other Senators, successfully passed its second reading in the Senate on Thursday.
Senator Abiru, in his lead debate, outlined the bill’s objective to establish a comprehensive legal framework for regulating and supervising all types of insurance businesses in Nigeria.
He emphasised the critical need to address the low penetration of insurance services in the country, which stands at a mere 0.5%, ranking 70th globally and 5th in Africa.
Despite being one of the oldest industries in Nigeria’s financial services sector, insurance has not achieved significant growth.
Senator Abiru, an accomplished economist and former bank chief executive, highlighted Nigeria’s young and vibrant population and growing GDP as indicators of the industry’s potential for exponential growth.
However, he stressed the necessity of reforms to fully realise this potential and contribute to the nation’s economic growth.
Senator Abiru pointed out that existing laws, such as the Insurance Act of 2003, Marine Insurance Act, Motor Vehicles (Third Party Insurance) Act, National Insurance Corporation of Nigeria Act, and Nigeria Reinsurance Corporation Act, have become outdated and ineffective in light of recent innovations and dynamics in the insurance sector.
The proposed bill aims to consolidate these various pieces of legislation into a single, robust legal and regulatory framework.
Its specific objectives include enhancing risk-based supervision, replacing the obsolete rule-based system, and ensuring that the insurance sector contributes positively to making Nigeria Africa’s financial hub and one of the world’s top twenty economies.
The Senators unanimously praised the bill’s provisions and commended Senator Abiru for his thorough research and critical initiative, which they believe will revolutionise Nigeria’s insurance sector.
