The newly passed Insurance Reform Act is more than just another policy update, it’s a turning point and it’s changing the way we all have to think about insurance in Nigeria.
If you own a clinic, a school, a church, a shop, an office, or even run events, you might now be required by law to have insurance. Not just for show, but to avoid penalties, closures, or even worse.
But what does this really mean for everyday people like you and I?
To answer that, let’s look at two real-life stories. One from a clinic owner in Yaba who thought insurance was optional, and another from a creative agency boss who thought the law didn’t apply to him. Both of them had a wake-up call.
What the New Insurance Reform Act Really Means for You
Story 1
Mrs. Adebayo’s Clinic & the Wake-Up Call
It was a regular Monday morning when Mrs. Adebayo, who runs a busy health clinic in Yaba, received a letter that made her heart race:
“This building is not insured. You have 14 days to comply or face penalties, including possible closure.”
She had always thought of insurance as “good to have,” not “must-have.” But now, she was being told it was the law and ignoring it could cost her not just money, but her business.
After some digging, she found out about Section 76 of the new Insurance Act, which now requires every public building including schools, clinics, malls, offices, churches, hotels, event centres to be insured against fire, flood, storm, and collapse.
It suddenly dawned on her that this wasn’t just about dodging penalties but about safeguarding everything she had worked so hard to build. Within days, she secured the right insurance and found herself not only compliant, but truly at peace.
Story 2
SA and His Advertising Agency
SA, a smart and sharp creative executive, runs a well-known advertising agency. He’d heard noise about the new law but thought it only affected landlords or government buildings. One evening, a heated argument broke out among his colleagues:
“This new law is just another money-making scheme for the government!”
SA disagreed. As someone who sells brand trust, he knew legislation like this could actually build public trust in the insurance industry if properly implemented. He called me the next day and asked:
“Who really benefits from this? Where does the money go? Why now? What is this new law all about?”
Let’s Break It Down: What is the Insurance Reform Act (2025) All About?
This new law called the Nigerian Insurance Industry Reform Act (NIIRA) 2025 was signed into law on August 5, 2025, and it’s the biggest insurance shakeup in decades. Here’s what it does in simple terms:
- Mandatory Insurance for Public Buildings
If your building is used by the public (school, hospital, shop, church, office, etc.), you must insure it against disasters like fire, collapse, flood, or earthquake.
- Why? To protect lives and property. If something goes wrong, insurance steps in to help.
- What happens if you don’t? You could pay a ₦1 million fine, go to jail for a year, or have your building shut down.
- Insurance Required Before You Build
If you’re starting a new building project, especially anything more than one floor, you must have Builders’ Liability Insurance.
- Covers: Accidents, injuries, damage, or collapse during construction.
- Before approval: You’ll need proof of insurance to get building permits.
- All Government Buildings Must Be Insured
The government is now leading by example, all federal properties must be insured.
- This means: Even ministries, schools, and public offices must comply, boosting industry trust and demand for insurance.
- Capital Requirements (Effective June 2026)
The old capital base was:
- ₦2 billion for life insurers (since 2007)
- ₦3 billion for non-life insurers (since 2007)
- ₦10 billion for reinsurers (since 2007)
Now it’s:
- ₦10 billion for life insurers
- ₦15 billion for non-life insurers
- ₦35 billion for reinsurers
Or risk-based capital, whichever is higher. - Why this change? To ensure only strong and stable insurers operate in Nigeria.
- Impact: Some weaker firms may merge or close, but stronger players will give better service and faster claims.
- Insurance Payouts Must Rebuild Properties
If your building is damaged by fire and you file a claim, the insurance money must go toward rebuilding or restoring the property.
- Purpose: To avoid misuse of claims funds and make sure properties are returned to safe conditions.
- Petroleum, Gas Stations Must Be Insured
Fuel stations and gas facilities must have third-party liability insurance in case of fire or explosion.
- Penalties: Fines up to ₦1 million or up to 2 years in jail if they don’t comply.
- Insurers Can Now Invest in Real Estate Projects
Insurers are now allowed to invest in real estate development, creating new capital sources for builders, developers, and REITs.
. This Law Overrides Conflicting Housing Acts
Wherever there’s confusion between insurance law and other housing laws (e.g., National Housing Fund Act), the Insurance Act takes priority.
- Digital Access and Regional Benefits
With more digitization and regional programs like the ECOWAS Brown Card, cross-border motor insurance and other covers will become easier for Nigerians to access
Who Benefits from All This?
Let’s answer SA’s big question:
➤ Who collects the premiums?
- Licensed insurance companies regulated by NAICOM (National Insurance Commission).
➤ Who benefits?
- You, the building owner, your staff, tenants, and the public.
- Insurance provides protection, support after losses, and peace of mind.
➤ Why was this law passed?
- Prevent avoidable tragedies (like building collapses as we have experienced in recent past)
- Make insurance your backup, not an afterthought.
- Build trust in insurance and improve the quality of services.
- Attract investors and support Nigeria’s push toward a $1 trillion economy.
Final Word: Insurance Is Now Non-Negotiable
Just like you need a driver’s license to drive, now you need insurance to build, own, or run a public building. This is not about punishment it’s about protection, planning, and prevention.
Mrs. Adebayo learned it.
SA asked the right questions.
Now it’s your turn to act.
Call to Action:
If you own a public property, manage a business, or are about to build, please talk to your insurer or broker today. The law is here, and so are the benefits, if you take action.
