The National Insurance Commission (NAICOM) has released guideline for the Collection, Management, and Administration of the Insurance Policyholders’ Protection Fund (IPPF).
The new guidelines, established under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, introduces a rigorous system of mandatory contributions and oversight designed to ensure that the “protection of policyholders and beneficiaries covered under an insurance policy” remains a top priority.
Effective immediately, all insurance and reinsurance companies operating in Nigeria must contribute 0.25% of their annual net premium income to the Fund. The Commission has set a firm deadline for these payments, stating that “contributions shall be paid into the Fund’s designated accounts with deposit money banks not later than 30th June of each year”.
To further strengthen the reserve, NAICOM will also inject 0.25% of the balance from the Security and Insurance Development Fund (SIDF) into the IPPF annually.
The stakes for non-compliance are remarkably high. The regulator has made it clear that “failure by any insurer or reinsurer to remit the full amount of its assessed contribution to the Insurance Policyholders’ Protection Fund within the stipulated timeframe shall constitute a ground for suspension or cancellation of its operating licence”.
This zero-tolerance approach extends to the repayment of loans, as the Fund is primarily intended to “resolve distress and insolvency of licensed insurers and reinsurers” and facilitate the “payment of claims admitted by or allowed against a licensed insurer or reinsurer which remains unpaid by reason of insolvency”.
