The Nigerian insurance industry is currently navigating a storm of scrutiny as the House of Representatives Subcommittee on Capital Market and Other Institutions investigates 25 prominent insurance firms over alleged financial misconduct. The probe, sparked by a formal petition and initiated at the National Assembly Complex in Abuja, is already sending shockwaves through an industry long plagued by trust issues and minimal market penetration.
According to the subcommittee’s chairman, Hon. Kwamoti Laori, preliminary findings reveal widespread infractions, including non-remittance of revenue due to the Federal Government, inconsistencies in financial reporting, delayed claims settlements, and lapses in premium remittance. These irregularities, Laori noted, may have cost the government hundreds of billions in lost revenue.
“This committee is saddled with the responsibility of treating a petition based on infractions from these insurance companies,” Laori said. “Those infractions have resulted in the Federal Government losing significant revenue. We want these companies to appear and either agree with or refute the claims.”
Despite formal invitations, many CEOs of the firms under investigation failed to appear before the committee. Laori expressed disappointment, emphasizing that only direct responses from top executives would be accepted. He also criticized the National Insurance Commission (NAICOM), the industry’s statutory regulator, for its perceived failure in oversight.
The Nigerian Insurers Association (NIA), representing the firms, has challenged the probe’s legitimacy in court. In a statement signed by its Director-General, Bola Odukale, the NIA claimed its actions were guided by legal counsel.
“The objective of approaching the court is to seek judicial guidance on the legality, propriety, and constitutional limits of the Committee’s intervention,” the statement read. “This raises serious questions about legislative overreach and the erosion of regulatory independence.”
The NIA stressed its commitment to lawful engagement with all arms of government while urging the National Assembly to respect the roles of statutory regulators like NAICOM, the SEC, and the Financial Reporting Council.
The public nature of the probe has prompted concerns from stakeholders who argue that such actions risk damaging the industry’s already fragile reputation. With insurance penetration in Nigeria still under one percent, any perception of instability could deter potential policyholders and investors.
“This probe, if not handled delicately, could further erode public trust,” warned Edwin Igbiti, former President of the Chartered Insurance Institute of Nigeria. “If they had concerns, they should have gone through NAICOM, the regulator who has access to the companies’ books.”
Igbiti argued that summoning 25 firms without clear individual allegations paints the entire industry in a negative light. “Such moves can destabilize companies that are just beginning to recover public confidence,” he added.
Ade Adesokan, an industry analyst and public affairs commentator, emphasized that legislative oversight must stay within constitutional limits. He cited the Insurance Act 2004, which vests supervisory powers solely in NAICOM.
“No parliamentary committee should circumvent the regulatory framework and begin direct interventions,” he said. “This investigation risks undermining democratic governance and the credibility of the industry.”
Adesokan recommended a collaborative approach where lawmakers work with NAICOM through briefings and policy reviews rather than conducting parallel investigations. He also urged the National Assembly to focus on strengthening the Nigeria Insurance Industry Reform Bill (2024) to empower regulators rather than create regulatory uncertainty.
While many agree that no industry should be above scrutiny, experts insist that regulatory oversight should be informed, fair, and channeled through appropriate institutions. The probe has highlighted the urgent need for improved corporate governance, transparency, and self-regulation within the insurance sector.
As the legal battle continues and the subcommittee insists on CEO appearances, the entire Nigerian insurance landscape hangs in the balance. Whether this process will lead to sector-wide reform or deepen mistrust remains to be seen.
However, what is clear is that restoring confidence in the insurance sector—critical for Nigeria’s economic resilience—requires balanced oversight, legal clarity, and a strong commitment to institutional integrity.