New rules take effect August 1, 2025; focus on innovation, consumer protection, and digital transformation
The National Insurance Commission (NAICOM) has issued a sweeping regulatory directive restricting standalone Insurtech firms in Nigeria from transacting certain high-risk insurance products. Under the new guidelines released on Tuesday and set to take effect from August 1, 2025, Insurtechs operating independently will be barred from offering special risk products, including oil and gas insurance, marine and aviation insurance, retirement life annuities, and insurance coverage for government assets and liabilities involving Ministries, Departments, and Agencies (MDAs).
This development marks a pivotal moment in the ongoing evolution of Nigeria’s insurance landscape, as regulators seek to balance innovation with prudential oversight.
Scope and Rationale of the Restriction
NAICOM clarified that the restrictions apply specifically to standalone Insurtech operators — those not functioning in partnership with licensed conventional insurers. The Commission explained that special risk products typically involve complex underwriting, larger capital requirements, and long-term liabilities that demand a more mature risk management framework, which many technology-based startups may not yet possess.
This move, the Commission noted, is consistent with its broader objective of safeguarding consumer interests, preserving market stability, and ensuring product suitability within the insurance technology space.
Licensing and Operational Requirements
As outlined in the new Operational Guidelines for Insurtech Businesses in Nigeria, all prospective Insurtech firms must submit applications in accordance with procedures specified in Schedule I of the document. NAICOM also reserves the authority to issue licenses with conditions tailored to each applicant, based on the applicable regulatory framework.
Insurtech firms are required to comply with a robust set of prudential and market conduct rules, covering areas such as:
- Risk management and actuarial oversight
- Investment practices
- Outsourcing arrangements
- Data protection and cybersecurity standards
Disputes between Insurtechs and their partner insurers must first undergo contractual arbitration before they may be escalated to the Commission. Consumers, however, retain the right to report unresolved transaction issues directly to NAICOM for investigation and redress.
Transition Period and Compliance Deadline
All existing operators — whether standalone or in partnership with licensed insurers — must ensure full compliance with the guidelines within 30 days from the effective date of August 1, 2025. This gives existing firms until the end of August 2025 to align their operations with the new requirements or risk regulatory sanctions.
Key Objectives and Strategic Vision
NAICOM stressed that the guidelines are not aimed at stifling innovation but rather promoting responsible digital transformation. The Commission identified several core objectives of the new rules:
- Encouraging innovation in the design and delivery of insurance products
- Protecting consumers through better transparency, dispute resolution, and service standards
- Clarifying regulatory expectations to reduce market ambiguity
- Building trust in the Insurtech ecosystem to accelerate adoption
- Establishing operational and licensing structures for both partnering and standalone Insurtech models
- Advancing Nigeria’s digital economy and fintech integration through a more modernized insurance sector
By introducing these regulations, NAICOM aims to foster a secure and enabling environment for the growth of Insurtech in Nigeria, while simultaneously reinforcing market confidence, especially in high-risk insurance segments where financial exposure is significant.
As Nigeria’s insurance sector continues its digital evolution, these guidelines serve as a foundation for regulatory certainty and sustainable innovation in the years ahead.