NAICOM: NIRA 2025 Establishes Policyholders’ Protection Fund to Safeguard Consumers

By Oluwakemi Kindness

The National Insurance Commission (NAICOM) says the Nigerian Insurance Industry Reform Act (NIRA) 2025 provides for the establishment of an Insurance Policyholders’ Protection Fund to protect policyholders when insurance companies are unable to meet their liabilities.

The Head of Market Conduct and Complaints Bureau at NAICOM, Olugbenga Jayesimi, disclosed this while speaking on the consumer protection mechanisms introduced under the new insurance law.

According to Jayesimi, the Protection Fund is designed to safeguard consumers in situations where insurance companies are facing financial difficulties or are going down.

“This fund takes care of situations where companies are not able to meet their liabilities. The Commission will quickly draw from this fund and use it to meet those liabilities,” he said.

He stressed that NAICOM’s goal is not to allow insurance companies to collapse, but to ensure stability and sustainability within the industry.

“The Commission does not include seeing any company going down. Our focus is on sustaining insurance companies and making them stronger and healthier,” Jayesimi stated.

He explained that the Policyholders’ Protection Fund forms part of broader reforms under NIRA 2025 aimed at strengthening consumer confidence and improving safety and soundness in the insurance sector.

Jayesimi added that the fund complements other measures introduced by the new law, including faster claims settlement, stricter licensing controls, and stronger market conduct rules.

“Insurance is about trust. When people are confident that their claims will be paid, they will do more business and even introduce others,” he said.

He noted that the Protection Fund is a key pillar of the Commission’s effort to ensure that policyholders are not left exposed when insurers face financial distress.

NIRA 2025, which came into effect in July, repealed the Insurance Act of 2003 and consolidated insurance regulation into a modern framework focused on policyholder protection, financial stability, and industry sustainability.