The Nigerian Insurance Industry Reform Act (NIIRA) 2025 is a landmark law meant to reposition the insurance industry for growth, integrity, and global competitiveness. The snag, however, is that the capacity of the National Insurance Commission (NAICOM), as industry regulator, to push through the reforms envisaged in the Act has come under public scrutiny, with industry experts and critical stakeholders citing the Commission’s huge regulatory transparency deficit as a major drawback. OMOBOLA TOLU-KUSIMO reports.
It wasn’t for nothing that all stakeholders in the insurance industry hailed the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 as game changer. To them, this landmark legislation is the much-needed tonic to re-energise and reposition the struggling insurance industry for increased growth and global competitiveness.
One of the key provisions in the Act that put stakeholders on an expectant mode over the emergence of a more dynamic insurance industry, drawing strength from the Act, is the power granted to the National Insurance Commission (NAICOM), as industry regulator, to effectively regulate the sector.
The expectation is that with the enhanced power at NAICOM’s disposal, the Commission is now on a better stead to execute its responsibilities without unnecessary litigations from law breakers. NAICOM’s tough, unbiased regulations are expected to wipe operators into line, forcing them to effectively execute their responsibilities to policyholders.
The thing is that with NAICOM as chief enforcer, the NIIRA 2025 will, in the reckoning of industry operators and policyholders, translate to improved services and profitability for the insurance industry, particularly considering the enhanced capital provided by NIIRA 2025 through recapitalisation.
However, some, if not all of these expected deliverables appear to be under serious threat, fueled by fears that NAICOM, as presently run, may constitute a stumbling block to the manifestation of the new era promised by the NIIRA 2025. This is so because NAICOM, as regulator, allegedly lack the same transparency, solvency compliance, and financial disclosure it supposed to demand from insurers.
For instance, since 2013, NAICOM has not published its own audited financials. These 12 years of silence from a regulator that is supposed to be demanding openness from the companies it oversees under the new regime have triggered fears over its capacity to push the reforms annunciated in the NIIRA 2025.
The crux of the matter is that NAICOM is a public institution funded through statutory allocations and regulatory levies, and is, therefore, obligated to disclose its financial records in accordance with Section 2(3)(d) (vi) of the Freedom of Information (FOI) Act, which mandates public institutions to publish detailed information about the receipt or expenditure of public or other funds.
The Fiscal Responsibility Act, 2007 also requires that public institutions maintain timely, audited accounts and make them accessible to the public to promote transparency and good governance. Analysts, however, say that the absence of such disclosures by NAICOM, or the opaqueness thereof, over the last decade signals a significant governance gap.
The implications of this situation are quite telling. For instance, for an insurance market valued at over N1.562 trillion in premiums as of 2024, the erosion of public confidence, forced by perceived lack of transparency, is palpable. The Commission’s management of regulatory funds, fees, and levies running into billions annually must be transparent to reassure investors and policyholders.
A particularly troubling aspect of the alleged lack of transparency by NAICOM is the uncertainty around revenues it generates from fines and penalties imposed on insurance operators. The public remains unaware of how much it collects, how these funds are managed, or whether they are reinvested to bolster regulatory capacity and industry development.
While the Commission’s enforcement tools, designed to promote compliance and protect consumers, often yield substantial sums annually, the perceived financial “darkness” around the management of the funds undermines stakeholder trust and raises critical questions about accountability and the effective use of resources intended to strengthen the insurance sector.
Apparently irked by this, shareholders at different company’s Annual General Meetings (AGMs) have never stopped calling out NAICOM over the huge fines and penalties it allegedly imposes on insurance operators. Some of them accuse the Commission of lacking in fiscal stewardship.
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They describe it as a serious red flag and an anomaly, noting that transparency in NAICOM’s finances would signal stronger governance, potentially boost investor confidence and encourage capital inflow into the industry, where data from the Nigerian Stock Exchange (NSE) shows that insurance stocks have underperformed relative to other sectors, partly due to investor concerns about regulatory risks and market opacity.
Checks by The Nation revealed that as of April 30, 2025, the Central Bank of Nigeria (CBN) published audited its financial statements for the year ended December 31, 2023. The CBN reported a profit of N38.8 billion in 2024, recovering from a record loss of N1.15 trillion in 2023.
The financial statements were prepared in line with the International Financial Reporting Standards (IFRS) and audited by KPMG Professional Services and Ernst & Young. The audited financial statements are also available on the CBN’s official website.
Similarly, the Nigerian National Petroleum Company Limited (NNPCL’s) audited financial statements for the year ended December 31, 2023 was released on August 19, 2024. The NNPC declared a net profit of N3.297 trillion for 2023, marking a 28 per cent increase from the N2.548 trillion recorded in 2022. A dividend of N2.1 trillion was also announced.
Like CBN, the NNPCL’s audited financial statements can be accessed on its official website. While experts describe the release of such financial statements as testament to the organisations’ commitment to transparency and accountability, same cannot be said of NAICOM. A visit to its website showed that it recently redesigned its website, but with no mention or highlight on its annual account.
Before the redesign of its website, the Commission listed its annual account up to 2013. Yet, insurance industry regulators, globally, such as the United Kingdom’s Financial Conduct Authority (FCA) and the U.S National Association of Insurance Commissioners (NAIC) maintain high standards of transparency by routinely publishing detailed financial and operational reports.
These disclosures underpin investor confidence and enhance market discipline. Even nearer home, the Kenya Insurance Regulatory Authority (IRA), operating in a similar emerging market context as Nigeria, consistently publishes its audited accounts and regulatory reports.
This transparency significantly contributed to improved investor trust and a steady increase in Kenya’s insurance penetration rates, which rose from three per cent in 2010 to over 4.5 per cent in 2023.
The point is that regulators that lack transparency often face challenges in enforcement and market development. This is why stakeholders are apprehensive that NAICOM’s prolonged lack of regulatory transparency and inability to make its financials public will set the insurance industry back, especially as it seeks to attract foreign direct investment and integrate with global insurance markets.
The fact that Commissioner for Insurance, Olusegun Omosehin, had upon assumption of office in 2024, set a new tone for the insurance industry to enable it play a pivotal role in achieving the $1 trillion economy target set by President Bola Tinubu appears to have given their apprehension more traction.
Operators, experts speak
Bad as the situation is, many industry operators are reluctant to openly speak on the matter, apparently for fear of reprisal by the regulator. However, one of them, who spoke after securing a commitment not to have his name in print, said a regulator that demands strict compliance from insurers but fails to lead by example risks losing moral authority.
“This,” according to him, “creates a ‘do as I say, not as I do’ perception.” He said failure to publish audited accounts for over a decade raises questions about internal controls, fiscal discipline, and compliance with public finance regulations.
The anonymous industry operator stressed that global investors and rating agencies view transparency from regulators as a baseline, insisting that NAICOM’s transparency deficit may affect Nigeria’s attractiveness in the broader financial sector.
His words: “As a public institution, NAICOM is subject to the Fiscal Responsibility Act, which mandates regular audited reporting. Non-compliance could mean lack of oversight, possible financial mismanagement, or political shielding.
“The newly signed NIIRA 2025 emphasises transparency and industry modernization. Also, NAICOM’s failure to publish its own reports could undermine the reform’s credibility. Publishing audited accounts isn’t optional but foundational for trust and regulatory integrity”.
Another Chief Executive Officer (CEO) of a reputable insurance company said for an industry striving for credibility and reform, leadership by example is not optional but essential. He posited that NAICOM, Nigeria’s apex insurance regulator’s silence, stretching over a decade, undermines both the spirit and letter of the regulatory responsibility it holds.
The CEO said the refusal or failure to publish audited accounts is more than a bureaucratic oversight. According to him, “It raises serious questions about internal governance, accountability, and adherence to Nigeria’s Fiscal Responsibility Act, which mandates annual disclosures for all public institutions.
“The silence fuels distrust, especially among stakeholders seeking confidence in an already fragile industry. If NAICOM is to command respect, enforce compliance, and attract long-term investor trust, it must first look inward. Publishing its financials is not just a statutory obligation, it is a moral imperative. A regulator that hides its books cannot credibly ask others to open theirs.”
He did not stop there. “In reform, example is the greatest force. It’s time for the NAICOM officials to practice what they preach. Let’s be blunt: you can’t lead a credibility crusade with your own books sealed shut,” he kicked.
Continuing, the CEO said: “Insurers are under pressure to meet capital requirements, adopt better governance, and comply with the NIIRA 2025. But when the referee won’t disclose how it spends public funds, the entire system starts to smell of double standards.”
He raised a number of posers: “What can be the reason for the nondisclosure for 11 years? Is it fiscal irresponsibility? Or poor internal controls? political cover? As he said, none of the answers to these inspire confidence, pointing out that in a fragile industry trying to rebuild public trust, confidence is everything.
“This is not just bad optics but regulatory hypocrisy. A regulator that fails to follow its own rules undermines every reform it tries to enforce. If NAICOM wants to be taken seriously under NIIRA 2025, it must first come clean. Transparency isn’t optional. It’s the bare minimum”, the CEO charged.
Despite the absence of published financial statements, NAICOM’s budget estimates continue to be approved.
For instance, the House of Representatives Committee on Insurance and Actuarial Matters adopted NAICOM’s 2024 budget performance and 2025 estimates, amounting to N29.931 billion, without publicly available financial reports to substantiate past expenditures.
The Commission is said to have invested in upgrading its Enterprise Resource Planning (ERP) software to Microsoft Dynamics NAV 2019, aiming to automate finance and administration processes.
A reliable industry source said while this suggests efforts toward improved financial management, the benefits of such systems are contingent on transparent reporting, which remains lacking.
An analyst, who spoke on condition of anonymity, said there should be immediate publication of financial reports; regular financial reporting; and strengthening of oversight mechanisms, if NAICOM must lead the charge in the new era of insurance promised by the NIIRA 2025.
He maintained that “NAICOM should release audited annual accounts for 2013 to 2024, demonstrating its commitment to transparency and regulatory integrity.
“They should also establish a statutory obligation for them to publish audited accounts annually within six months of the fiscal year-end and empower independent oversight bodies, including the National Assembly and civil society, to review NAICOM’s financial reports and regulatory performance.”
Amid these weighty issues around its regulatory role under the NIIRA 2025, NAICOM, curiously, has declined to volunteer comments. Efforts by The Nation to get the Commission’s Spokesman, Abba Halil Inuwa, to react on the issues raised by various stakeholders have so far proved abortive.
The Nation had since January 2025, sent questions to Inuwa to get his reaction to some of the issues raised, but he never responded till date. At a point he, directing this reporter to his colleague named Chidi, saying he was on leave.
The said Chidi, upon being approached with the same questions responded, saying: “I am not in the capacity to give you the information you seek but I will communicate your request to the appropriate authority. He did not respond to follow up request for comments.
Again, on February 7, 2025, this reporter went back to the Commission’s Spokesman, Inuwa, request for responses since he had resumed from his leave. He said “I will revert soon” but never did.
On August 20, a return to Inuwa to remind him that he was yet to respond peompted yet another evasive response from him: “I have advised you to write officially to the Commission. It might be faster.” Upon further insistence on getting NAICOM’s response, Inuwa went incommunicado till date.
