In a decisive move towards revitalizing Nigeria’s financial landscape, kakalistiq.com reports that the Nigeria Insurance Industry Reform Bill, 2024 (SB 393), passed its second reading in the Senate on Thursday. Sponsored by Senator Mukhail Adetokunbo Abiru, FCA (Lagos East) – Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions – alongside 41 other Senators, the bill aims to establish a comprehensive legal framework for the regulation and supervision of all insurance businesses in Nigeria.
Senator Abiru, an esteemed economist and retired bank Chief Executive, led the debate by highlighting the bill’s core principles and the pressing need for reform in Nigeria’s insurance sector. Despite being one of the oldest components of the nation’s financial services, insurance services in Nigeria have seen alarmingly low penetration, with a rate of just 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,” Senator Abiru asserted. “However, to truly thrive in the next decade, the industry must reform to take advantage of the opportunities and contribute to economic growth in the country.”
Senator Abiru also addressed the outdated nature of current legislation, including the Insurance Act of 2003, the Marine Insurance Act, the Motor Vehicles (Third Party Insurance) Act, the National Insurance Corporation of Nigeria Act, and the Nigeria Reinsurance Corporation Act. These laws, he argued, are no longer adequate in the face of recent innovations and the dynamic nature of the insurance industry.
The bill aims to consolidate these various laws into a robust legal and regulatory framework, ensuring the insurance sector’s contribution to the Financial System Strategy’s primary objective: positioning Nigeria as Africa’s financial hub and one of the twenty largest economies in the world. The proposed legislation seeks to evolve effective risk-based supervision, replacing the outdated rule-based supervision currently in place.
Senators across the board hailed the provisions of the bill, commending Senator Abiru for his well-researched and critical initiative. They expressed unanimous support, recognizing the bill’s potential to revolutionize Nigeria’s insurance sector and drive substantial economic growth.
As the Nigeria Insurance Industry Reform Bill, 2024, progresses towards becoming law, it promises to usher in a new era of regulatory excellence and economic prosperity, solidifying Nigeria’s position on the global financial stage.
