Insurance companies in Nigeria now face tougher sanctions for delaying the settlement of claims beyond 60 days after notification, following the enactment of the Nigerian Insurance Industry Reform Act 2025.
Under Section 210 of the new law, insurers must take action on claims within the stipulated period or risk a fine of N500,000 and monthly compound interest at the prevailing bank rate on the claim amount. The provision applies to all written claims by policyholders or other entitled parties, except in cases where liability is denied.
The National Insurance Commission (NAICOM) had long pushed for stricter enforcement to improve public confidence in the industry. The new law makes the requirement legally binding, protecting policyholders from undue delays in receiving legitimate claim payments.
The legislation also aligns with the Service Charter timelines or as otherwise prescribed by NAICOM, ensuring compliance across the sector.
