Fast claims settlement reforms aim to restore trust, boost insurance penetration, and drive mass patronage
One of the most impactful reforms introduced under the Nigerian Insurance Industry Reform Act (NIIRA) 2025 is the provision on fast claims settlement and streamlined claims processing—a move industry stakeholders believe will significantly improve public confidence and increase insurance patronage across Nigeria.
The reform, widely seen as a defining legacy of President Bola Ahmed Tinubu’s administration in the insurance sector, directly addresses one of the industry’s most persistent challenges: delayed or disputed claims payments.
Fast Claims Settlement: What the Law Says
Under Section 210 of NIIRA 2025, all insurers are now mandated to process and settle claims strictly within timelines set out in the National Insurance Commission (NAICOM) Service Charter, and in any case, no later than 60 days from the date of claim notification.
To enforce compliance, the law introduces penalties for defaulting insurers, including compound interest on outstanding claim amounts, effectively discouraging unnecessary delays. The Act also establishes a zero-tolerance policy for delayed claims, aimed squarely at restoring trust in the insurance system.
Section 211 of the Act, dedicated entirely to claims settlement, further strengthens policyholder protection and accountability across the industry.
Streamlining Claims Processing
Beyond timelines, NIIRA 2025 introduces practical reforms to make claims processing faster and more efficient. These include:
- Expanding acceptable communication channels to include electronic means such as email
- Removing the requirement for a police report in motor accident claims, except where there is death or serious bodily injury, provided sufficient proof of loss exists
- Strengthening provisions for the protection of policyholders’ interests
These measures are designed to eliminate bureaucratic bottlenecks and reduce the demand for unnecessary documentation—long considered a major source of frustration for policyholders.
Implications for Insurers and Policyholders
Industry observers say strict adherence to NIIRA’s claims provisions could finally resolve the long-standing trust deficit between insurers and the Nigerian public. If insurers comply and NAICOM effectively enforces sanctions, the sector could witness a surge in patronage and improved public perception.
For policyholders, the law significantly reduces the burden of prolonged claims procedures and arbitrary delays, making insurance more accessible and reliable—closer to global best practices seen in developed markets.
Why Claims Settlement Has Hurt Insurance Patronage
Despite sustained efforts by insurers to raise awareness, introduce innovative products, and digitize distribution through insuretech platforms, claims settlement remains the weakest link in connecting Nigerians to insurance.
Even though the industry pays billions of naira in claims annually, many Nigerians still believe insurers do not pay claims at all. This perception has proven difficult to shake and continues to hinder insurance penetration and contribution to GDP growth.
Misunderstanding vs. Genuine Claims Issues
A significant portion of claims disputes, analysts note, arises from poor understanding of policy coverage. Many policyholders assume all risks are covered once a policy is purchased, leading to accusations of non-payment when claims fall outside policy terms.
However, there have also been cases of genuine claims left unpaid, particularly involving financially weak insurers. Past incidents involving firms such as Niger Insurance, Standard Alliance Insurance, and Investment and Allied Insurance (IAA) saw policyholders and investors protest unpaid claims—events that ultimately led to regulatory intervention, license withdrawals, and liquidation.
Even among financially stable insurers, lingering disputed claims have continued to damage the industry’s image.
NAICOM’s Zero-Tolerance Stance
Speaking at a recent media retreat for insurance journalists in Abeokuta, Ogun State, the Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, expressed strong confidence that NIIRA 2025 will end controversies surrounding claims settlement.
He assured stakeholders that NAICOM’s enhanced supervision would ensure full compliance with the law.
“Our stance on claims settlement is unequivocal: we maintain zero tolerance for non-settlement of genuine claims,” Omosehin said. “Insurance companies must sell only what they can service and deliver.”
He added that NAICOM has tightened standards around disclosure, sales practices, pricing fairness, and claims handling, while also shortening response times for complaints and clarifying escalation channels for policyholders.
Hope for a More Trusted Insurance Industry
Analysts believe awareness of NIIRA’s strict claims settlement provisions will encourage Nigerians to patronize genuine insurers and pay the correct premiums—especially for compulsory policies such as Motor Third Party Insurance.
Although the law now sets the premium at ₦15,000 (up from ₦5,000) and increases third-party compensation from ₦1 million to ₦3 million, many motorists still opt for fake certificates costing as little as ₦2,000—leaving accident victims without compensation.
Experts stress that only genuine policies offer real protection, and NIIRA 2025 makes prompt claims settlement possible only when the right cover is purchased from licensed insurers.
