By John Joseph
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The Senate has passed for second reading a bill that seeks to provide a comprehensive legal framework for the regulation and supervision of all manner of insurance businesses in Nigeria. The Nigeria Insurance Industry Reform Bill, 2024 sponsored by the chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Adetokunbo Abiru (APC Lagos East), and 41 other Senators during plenary.
The bill seeks to repeal the Insurance Act, Cap117 2004, the Marine Insurance Act, and other insurance-related laws.
The new bill aims to provide a comprehensive legal and regulatory framework for the insurance industry in Nigeria.
The current laws have become obsolete and ineffective due to innovations and dynamics in the industry.
The insurance industry in Nigeria has a low penetration rate of 0.5%, ranking 70th globally and 5th in Africa.
The bill’s objectives include consolidating existing legislation, ensuring ethical practices, and enhancing the industry’s global competitiveness.
The Senate Committee on Banking, Insurance, and Other Financial Institutions has been tasked to review the bill and report back to plenary in one week.
Abiru, while leading debate on the general principles of the bill on Thursday decried the low penetration of insurance services in Nigeria, despite being one of the oldest industries in the nation’s financial services sector.
He put the country’s penetration rate at 0.5%, ranking 70th globally and 5th in Africa.
“With its young and vibrant population and growing GDP, the potential for exponential growth is undeniable. However, to truly thrive in the next decade, the industry must reform in order to take advantage of the opportunities and contribute to economic growth in the country,” he stressed.
In reference to the extant laws that regulate the practices of various insurance businesses, like the Insurance Act 2003, the Marine Insurance Act, Motor Vehicles (Third Party Insurance) Act, National Insurance Corporation of
Nigeria Act, and Nigeria Reinsurance Corporation Act, these laws, according to Senator Abiru, have become obsolete and ineffective in the wake of innovations and dynamics that have characterized the practices of insurance in recent time.