A major restructuring of the insurance industry is imminent with yesterday’s passage of a bill by the Senate to amend the laws and refocus the sub-sector in line with current realities.

The bill, passed by the Red Chamber after considering the report of the Committee on Banking, Insurance and Other Financial Institutions, upgrades the minimum capital for re-insurance firms to a minimum of N35 billion. 

Apart from re-insurance, the proposal known as the 2024 Nigerian Insurance Industry Reform Bill, puts non-life insurance capital base at N15 billion and life assurance at N10 billion. 

The current minimum capital limits of the three classes are N10 billion for re-insurance firms, N2 billion for life and  N3 billion for non-life insurance organisations.

Many of the 67 companies might be unable to raise the funds, creating the possibility of mergers, acquisitions and outright extinction of some firms.

Managing Director/CEO of Stanbic IBTC Insurance AkinJide Orimolade confirmed last night that the N15 billion proposed capital base for non-life business would likely result in merger and acquisition.

According to him, the bill which was read for a second time on July 18, seeks to consolidate various existing legislations regulating insurance businesses in the country.

The committee chairman listed the legislation to include the Insurance Act 2003, the Marine Insurance Act, the Motor Vehicles Third Party Insurance Act, the National Insurance  Corporation Act, and the Nigerian Reinsurance Corporation Act.

According to him, another major objective of the bill was to enable Nigerians to have a better future and give the nation a robust legal and regulatory framework that would see the insurance sector contributing positively to the economy.

He said to make Nigeria Africa’s financial hub and one of the 20 largest economies in the world, there was the need to evolve effective risk-based supervision in the regulatory system.

“Economies change at all times. It is, therefore, incumbent on the authorities of every nation to recraft their legislation to go in tandem with contemporary realities. And this is what has been done by the passage of this legislation.

“The intent is to restructure the insurance ecosystem to accommodate contemporary happenings within our economy.’’

For the bill to become law, the House of Representatives will have to pass it along the lines of the Senate and the President will give his assent.

THE NATION