By The Nigerian government has made it clear that online insurance businesses must now be licensed before operating in the country.
President Bola Tinubu recently signed the Nigerian Insurance Industry Reform Act (NIIRA) 2025 into law. Among other things, the law requires that any person or company offering insurance services over the internet or electronically must first get a license from the National Insurance Commission (NAICOM). This is to ensure proper regulation and protect consumers from unregulated operations.
Section 201 of the Act states clearly: no one can start or run a web-based insurance business without a commission-issued license. NAICOM also has the power to set rules and impose penalties if companies break these rules.
The law goes beyond licensing by requiring insurance providers to have strict policies to stop terrorism financing and money laundering. This includes knowing their customers well (KYC), anti-money laundering (AML) procedures, and measures against financing weapons of mass destruction.
Penalties for breaking the law are stiff. Individuals caught running unlicensed insurance businesses face fines of up to N25 million. For companies, fines can reach N50 million, and top executives might face prison sentences of up to two years.
This law is part of a bigger reform to modernize Nigeria’s insurance sector, make it more secure, and encourage digital business growth, all aimed at boosting Nigeria’s economy towards becoming a $1 trillion market.
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