Insurance Law and Regulation in Nigeria
Sources of law
Nigerian insurance law blends English common law and equity (received through the received-English-law statutes), Nigerian case law, statute and trade custom - custom must be reasonable, notorious and not inconsistent with the contract. Core statutes include the Insurance Act 2003 (registration, capital, conduct, intermediation, policyholder protection), now substantially consolidated/replaced by the Insurance Industry Reform Act 2025, together with the Motor Vehicles (Third Party) Insurance Act, the Marine Insurance Act, the NAICOM Act and the NICON legislation. Always check the current statute before quoting a section number.
Regulation
NAICOM licenses insurers, reinsurers, brokers, loss adjusters and agents; prescribes minimum capital; approves wordings and rates; and handles complaints. Market bodies - NIA (insurers), NCRIB (brokers), CIIN (professional body) - set standards but do not license.
Contract law overlay
An insurance contract needs offer, acceptance, consideration (premium), capacity, intention and legality. The “no premium, no cover” rule makes receipt of premium a condition precedent to the insurer assuming risk - a classic trap where a cover note was issued but premium went unpaid. In Nigerian practice a broker is treated as the insurer’s agent for premium collection, so payment to a regulated broker generally counts as payment to the insurer; an agent acts for the insurer, not the insured.
Traps
- Strict construction of exclusions; ambiguity is read contra proferentem against the insurer.
- Registration, not mere incorporation, is required to carry on insurance business.
- Statutory requirements (e.g. compulsory third-party motor and public building insurance) override contrary policy terms.
Rule of thumb
Where statute and wording conflict, statute wins; where wording is ambiguous, the insured wins.