New Industry Act Mandates Insurance for Gas Stations, Public Buildings, Others
- President Bola Ahmed Tinubu recently signed the Nigerian Insurance Industry Reform Act, which mandates that gas and petroleum stations, as well as public buildings, be insured
- The Act imposes penalties, including fines and imprisonment, for non-compliance, and establishes stricter regulations for insurers, such as the cancellation of licenses for companies failing to settle claims
- Additionally, NAICOM has issued new insurance licenses to SanlamAllianz Life and General Insurance Nigeria Ltd., expanding the industry's player base
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
President Bola Ahmed Tinubu signed the Nigerian Insurance Industry Reform Act (NIIRA) last week, which requires all gas and petroleum filling stations, as well as the vehicles that transport these goods, to be insured against third-party losses resulting from unintentional fire or explosion.
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In accordance with the document that the National Insurance Commission (NAICOM) formally made public, owners of gas and petroleum refilling stations who do not have third-party insurance face a two-year jail sentence.
In particular, Section 75 of the NIIRA Act mandates that gas and petroleum stations carry insurance against third-party losses in the event of a fire or explosion. Additionally, a copy of the insurance certificate must be prominently displayed at refilling stations or included in transport documents.
The law also stipulates that "non-compliance with these insurance requirements can result in fines of at least N1 million or imprisonment for a minimum of two years."
Similarly, the law has increased the penalties for public building owners and occupiers who fail to maintain insurance from N100,000, one year in jail, or both, to N1 million or up to 12 months in jail.
Additionally, according to Section 76 of the Act, "all public buildings must be insured against various hazards to ensure safety and liability coverage."
This means that public buildings must be insured against these and additional risks as established by the Commission, including collapse, fire, earthquake, storm, and flood.
“The insurance policy must cover legal liabilities for loss or damage to property, bodily injury, or death suffered by users and third parties.”
According to the new insurance law, direct insurers are required to pay 0.25 percent of net premiums received quarterly into a Fire Services Maintenance Fund, adding that “insurers failing to comply with payment requirements face penalties of up to 10 times the amount due.”
Also, “owners or occupiers who do not comply with insurance provisions face fines of at least N1 million or imprisonment for up to 12 months.”
Regarding non-payment of claims by any erring insurer, the law states: “Any insurance company that has not less than five complaints of failure to pay claims promptly, as verified by the National Insurance Commission (NAICOM), risks the cancellation of its license, as provided by the Nigerian Insurance Industry Reform Act (NIIRA) 2025. This is contained in Section 8, Sub-section 1(m) under the cancellation of license.”
Source: Getty Images
According to the NIIRA Act, if an insurer does not establish the Special Reserves as required by the Commission, its license will also be revoked. NAICOM cautioned that an insurer's license may be revoked legally for failing to maintain the necessary reserves or meet the capital or solvency requirements set forth by the Commission.
The Commission also established the 2025 Recapitalization Committee at the same time.
NAICOM issues new insurance licences to Sanlam Allianz
Legit.ng reported that the National Insurance Commission (NAICOM) has issued two new insurance licenses, thus welcoming more players into the industry.
The two latest additions are SanlamAllianz Life and General Insurance Nigeria Ltd.
Speaking at the handover ceremony in Abuja, the Commissioner for Insurance, Olusegun Ayo Omosehin, said NAICOM is committed to ensuring the growth of all insurance operators in the country.
Source: Legit.ng
