The Nigerian insurance landscape has just undergone a major shake-up. With the signing of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 by President Bola Ahmed Tinubu, all petroleum and gas refilling stations, as well as vehicles transporting these products, must now carry mandatory third-party insurance against losses from accidental fire or explosions.
The National Insurance Commission (NAICOM) confirmed that non-compliance will attract hefty fines or prison terms, marking one of the most significant enforcement moves in Nigeria’s insurance history.
What the New Law Says
- Section 75:
- All petrol and gas stations must have valid third-party loss insurance covering fire and explosion incidents.
- A copy of the insurance certificate must be displayed prominently at stations or included in transport documents.
- Penalty for non-compliance: At least ₦1 million fine or minimum two-year jail term.
- Section 76:
- Public buildings must be insured against hazards like collapse, fire, earthquakes, storms, floods, and other risks specified by NAICOM.
- Policies must cover legal liabilities for property damage, bodily injury, or death.
- Non-compliance: Fine of at least ₦1 million or 12 months imprisonment.
Tougher Rules for Insurers
The NIIRA also cracks down on insurance companies that:
- Fail to pay claims promptly — if NAICOM verifies five or more complaints, the company risks licence cancellation.
- Do not maintain Special Reserves or meet capital/solvency requirements — also grounds for losing their licence.
Additionally, insurers must pay 0.25% of net premiums quarterly into the Fire Services Maintenance Fund or face penalties up to 10 times the due amount.
Recapitalisation Drive Launched
Alongside the new law, NAICOM has inaugurated the 2025 Recapitalisation Committee, chaired by Oluwatoyin Charles, Director of Supervision.
Committee Mandate:
- Develop a Recapitalisation Roadmap.
- Issue guidelines and circulars on capital requirements.
- Recommend minimum capital composition.
- Identify incentives and concessions from other regulators.
The Commissioner for Insurance, Olusegun Ayo Omosehin, stressed that recapitalisation is key to stabilising Nigeria’s insurance industry and achieving the Federal Government’s $1 trillion economy target.
Why This Matters
With NIIRA 2025, Nigeria’s insurance sector is entering a new era of enforcement, transparency, and accountability. For petroleum and gas operators, compliance is no longer optional — it’s the law. For insurers, the bar for service quality and financial strength has been raised higher than ever.
