Legal practitioner, Attorney Asukwo Mendie Archibong, has shed light on the far-reaching provisions of the Nigeria Insurance Industry Reform Act, 2025 (NIIRA), describing it as a landmark piece of legislation that reshapes the nation’s insurance landscape. Speaking on the new law signed by President Bola Ahmed Tinubu in August, Archibong noted that the Act consolidates decades of fragmented statutes, expands compulsory insurance, and provides stronger enforcement powers to regulators.
According to him, the NIIRA repeals older laws such as the Insurance Act, the Marine Insurance Act, and the Motor Vehicles (Third Party Insurance) Act, while creating a unified framework aligned with global best practices. He identified eight key reforms that will significantly impact developers, government institutions, insurers, and operators in high-risk industries.
1. Compulsory Insurance for Buildings Under Construction
Archibong explained that the Act makes it mandatory for builders to secure liability insurance before construction work begins. “No building permit will be issued without proof of insurance coverage for third-party injury, death, or structural collapse,” he stated, adding that this closes longstanding regulatory gaps in the real estate sector.
2. Compulsory Insurance for Public Buildings
He stressed that owners of public-access buildings—such as hotels, schools, shopping malls, and office complexes—must now insure their properties against collapse, fire, flood, earthquake, and storm damage. “This is designed to protect lives and safeguard investments where large numbers of people congregate,” he said.
3. Mandatory Coverage for Petroleum and Gas Facilities
The attorney highlighted that petrol stations, gas plants, and other high-risk energy facilities must carry adequate insurance policies. This, he noted, ensures that operators, landlords, and host communities are protected in the event of industrial accidents.
4. Enforcement Powers and Criminal Penalties
Archibong underscored that the Act empowers regulators, working with the National Insurance Commission (NAICOM), to seal off non-compliant buildings. Offenders risk heavy fines and a minimum prison sentence of three years. “This shows that non-compliance is no longer a civil matter but a criminal offence,” he warned.
5. Mandatory Use of Fire Insurance Proceeds
He explained that in cases where properties are damaged by fire, insurance payouts must now be applied directly to rebuilding or restoring the affected structure. “Cash settlements for unrelated purposes are prohibited, ensuring asset value is preserved,” Archibong said.
6. Government Asset Insurance
For the first time, all ministries, departments, and agencies are legally required to insure government-owned properties and assets. Archibong described this as a “bold step in embedding risk management into public sector governance.”
7. Insurers’ Investment in Real Estate Development
The Act allows insurers, subject to NAICOM’s approval, to invest directly in real estate projects. Archibong said this will open up fresh capital for infrastructure development while deepening insurers’ role in national economic growth.
8. Precedence Over Conflicting Housing Laws
Finally, he pointed out that where the NIIRA conflicts with other laws, such as the National Housing Fund Act, the NIIRA takes precedence. “This legal clarity eliminates uncertainty for stakeholders planning compliance,” he remarked.
Archibong concluded that the Act represents more than a regulatory update—it is a structural reform that ties insurance to national development. He urged developers, government agencies, and energy operators to integrate compliance into their planning and operations, warning that the era of lax enforcement is over.
“The NIIRA,” he said, “is not only about compulsory coverage but about strengthening Nigeria’s financial markets, protecting lives and property, and ensuring that insurance truly supports our infrastructure and economic aspirations.”
