The National Assembly of Nigeria wants to introduce a new rule: if someone runs an insurance business without a license, they will have to pay a huge fine of N25 million.
This idea is part of the Nigeria Insurance Industry Reform Bill, 2024, which aims to change the current insurance laws in Nigeria.
If the law is passed, anyone caught running an insurance business without the right permission will have to pay N25 million, go to jail for two years, or both.
Right now, the fine for this is N250,000, so this is a big increase.
Big Fine for Bosses of Illegal Insurance Companies
If a company is found guilty of the same thing, the fine is even higher. The main people in charge will each have to pay N50 million and could also go to jail for two years.
The bill says:
“A person who does any insurance business without a license breaks the law and will have to pay N25,000,000.00 or go to jail for 2 years, or both.”
“If it’s a company, the main person in charge will have to pay N50,000,000.00 or go to jail for 2 years, or both.”
The bill also says that if someone wants a license to run an insurance business, they have to be a registered company according to Nigerian law. This makes sure only legal businesses can offer insurance.
Once they get the license, they must run their business wisely, manage risks properly, stay financially stable, and follow the rules. If they don’t, they can lose their license.
The law lists reasons why an insurer might lose their license. These include going bankrupt, not having enough money, stopping their business, and being involved in fraud. If they lose the license, they can’t take new clients, and the government might take over to manage the company.
What You Should Know
In July 2024, the Senate read this bill for the second time. They are discussing how to improve the insurance industry in Nigeria.
The bill is suggested by Senator Adetokunbo Abiru from Lagos East. He wants to replace older insurance laws with this new one.
According to Senator Abiru, this bill aims to create a complete set of legal and regulatory rules for the insurance business in Nigeria.