The National Assembly of Nigeria has introduced a significant penalty for unlicensed insurance operations under the proposed Nigeria Insurance Industry Reform Bill, 2024.
If enacted, the bill would impose a hefty fine of N25 million or a two-year prison sentence, or both, on individuals engaging in insurance business without proper licensing.
This proposed fine represents a substantial increase from the N250,000 penalty stipulated in the Nigeria Insurance Act of 2003. For companies, the bill proposes a fine of N50 million for principal officers found guilty, with similar prison terms applicable.
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The reform bill aims to overhaul Nigeria’s insurance regulatory framework, ensuring that only legally incorporated entities under the Companies and Allied Matters Act No. 3 of 2020 can operate. Insurers must adhere to strict principles of risk management and financial stability, with the possibility of license revocation for non-compliance.
The Senate passed the bill for a second reading in July 2024, marking a significant step towards a more robust regulatory framework in Nigeria’s insurance sector.
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