The National Insurance Commission (NAICOM) has established the Insurance Policyholders’ Protection Fund to safeguard policyholders when insurers fail to meet their obligations.
Under the new Nigerian Insurance Industry Reform Act, 2025, all insurers and reinsurers must contribute 0.25% of net premium income annually into the Fund, which will act as a financial safety net for claim payments in cases of insolvency or licence cancellation.
The Fund will be independently managed by a qualified fund manager registered with the SEC, invested in low-risk government instruments, and subject to quarterly reporting, audited accounts, and stress tests.
Disbursements will be made as loans to troubled insurers strictly to settle claims within 10 working days, with repayment expected within 24 months. Access requires financial records, actuarial valuations, and due diligence by auditors. A dedicated committee will supervise operations and enforce compliance, with non-contributing insurers risking loss of licence.
