The House of Representatives has passed the Insurance Reforms Bill into law, mandating all insurance companies in Nigeria to comply with the Know Your Customer (KYC) initiative as part of efforts to combat terrorism financing and money laundering.
The bill, which was passed on Wednesday, had earlier been approved by the Senate on December 18, 2024. It was sponsored by the Deputy Senate President, Senator Barau Jibrin.
Clause 202 of the bill specifically addresses anti-money laundering, terrorism financing, and the proliferation of weapons of mass destruction.
It requires insurance institutions to adopt policies ensuring compliance with KYC, Anti-Money Laundering (AML), Combating Financing of Terrorism (CFT), and other regulatory directives.
The bill also mandates internal control measures to prevent transactions linked to the proliferation of weapons of mass destruction.
Subsection 2 states that “notwithstanding anything to the contrary in this Bill or any other enactment, the Commission shall make regulations, guidelines and policies from time to time to fight against money laundering, and combat the financing of terrorism and the proliferation of weapons of mass destruction for insurance institutions, in line with international best practices and standards.
In addition, it said: “The Commission shall liaise with relevant bodies in other countries with similar objectives for the purposes of sharing information and relevant data that would aid the fight against money laundering, and combat the financing of terrorism and the proliferation of weapons of mass destruction.”
It gives the National Insurance Commission over to impose administrative sanctions against insurance company.
The law makes it mandatory for all employers in the country to take a life assurance policy for their employees.
It states that “notwithstanding any other provision in this bill and any other act, every employer shall maintain a group Life Assurance policy in favour of each employer for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the date of commencement of the cover.
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“Where an employee dies, his entitlement under Group Life Assurance policy maintained under subsection 1 of this section shall be paid by under writer to the named beneficiary in line with section 67 of the bill
“No Group Life Assurance policy shall be issued without clearly stating the employer as trustee and employee as the life assured and containing the details specified in subsection 4 of this section.
“An insurer who fails to comply with the requirement of this section shall be liable to a penalty of not less than N10 million or as the commission may determine from time to time.
“In the event of the death of an employee without a group life cover, the employer shall be liable to pay three times the total emolument of such employee.
“Where an employee is missing and is not found within a period of one year from the date he was declared missing, and a board of inquiry set up by the commission makes a determination that having regards to available information and all relevant circumstances, it is reasonable to presume that the employee is dead, the provisions of section 68(2) of this bill shall apply”.
Clause 80 of the law which is expected to be transmitted to the President for his assent soon also makes it mandatory for health care provider to maintain a professional indemnity insurance from a registered insurance company and display in its office its certificate of insurance.
It further provides that “health care provider who fails to comply with the provision of this section is liable to such fine as may be prescribed by the commission in consultation with the National Health Insurance Authority or any other body established by an act of the National Assembly to replace it
“Notwithstanding the provisions of any other law, no policy holder’s fund or assets kept with an insurer shall be seized or subject of any execution of judgement debt or be used to meet the claims of any of the insurer’s creditors in the event of liquidation, winding up or otherwise cessation of business of the insurer.”
It also provide that Police report in motor accidents cases may not be necessary for insurance claim where there is sufficient evidence of proof of loss it damage except when there is death or bodily gatmm
The provision states that “where any claim referred to under this Part and Part XI arises out of an accident involving one or more vehicles, it shall not be necessary, if there is sufficient evidence of proof of loss or damage, for any claimant to report and deliver a police report to the insurer, except death of or serious bodily injury to a person is involved.
“Without prejudice to any other mode of proof, it is sufficient evidence of proof of loss or damage for the purpose of this section, where (a) only one person is involved in the accident, the person delivers a statement of the facts to the insurer concerned together with a statement of an eye witness to the accident, if any; or (b) more than one person is involved in the accident, each person delivers a statement of the facts to the insurer or insurers concerned and the alleged facts do not differ in any material particular.
“Nothing in this section shall be construed as implying that a police report is not required in the case of claims arising from car theft.”