NIIRA 2025: What Nigeria's New Insurance Law Means for Takaful Buyers (2026)

On 31 July 2025 President Tinubu signed the Nigerian Insurance Industry Reform Act, the biggest rewrite of Nigerian insurance law in a generation. It repeals and consolidates the Insurance Act 2003, the Marine Insurance Act and the NICON and Nigeria Re statutes into one law, and for the first time writes takaful into primary legislation. Most coverage of NIIRA has been written for insurers. This one is written for buyers, takaful buyers specifically, using the Act's own text and NAICOM's implementation record, verified August 4, 2026.

Section 200: takaful is now in the statute book

Before NIIRA, Nigerian takaful lived on NAICOM's Takaful Operational Guidelines 2013, regulator-made rules without their own Act. Section 200 changes that: no person may carry on takaful business without a NAICOM licence, and the Commission gains explicit statutory power to issue takaful regulations. For buyers this does three things. It makes the licence checkable against a legal standard: exactly five operators qualify, Noor, Jaiz, Salam, Hilal and Crown. It ends any argument that takaful certificates are second-class paper for banks, courts and corporate procurement. And it clears NAICOM to write takaful-specific consumer rules, on top of the existing two-layer Shariah governance of operator-level Advisory Councils of Experts plus NAICOM's own Takaful Advisory Council.

Section 210: the 60-day claims rule with teeth

The old law gave insurers 90 days and a flat ₦500,000 fine for lateness. NIIRA's Section 210 requires all admitted claims settled within 60 days of notification (special risks: admit or deny within 60 days, then settle within 60 days of the discharge voucher), and any denial of liability or documentation gap must be communicated in writing within 60 days. The penalty is the real upgrade: ₦500,000 plus payment of the claim with monthly compound interest at the prevailing bank rate, so delay now costs the insurer more every month. If an insurer still fails to pay, you can ask NAICOM to settle from the insurer's statutory deposit. Against that floor, Salam's published 48-hour promise for validated claims and Noor's ₦11 billion claims record become the standards to hold the market to.

Section 84: compulsory motor cover, now actually enforced

Third-party motor insurance has been nominally compulsory for decades; NIIRA made it expensive to ignore. Driving without a third-party policy now carries a minimum ₦250,000 fine or up to 12 months imprisonment or both. Fare-paying passengers must be covered by transport operators at a minimum of ₦2,000,000 per passenger for death or total permanent disability. Legal commentary also notes third-party property damage benefits updated to ₦3,000,000, against the 2003 Act's ₦1,000,000. If you have been running without cover, the cheapest legal fix is a genuine third-party certificate, and taking it takaful costs no extra effort: Jaiz issues through its app in five steps, Salam sells via app, WhatsApp and USSD (*2200#). Beware fake certificates; buy directly from a licensed operator and confirm the policy appears in your name. Our motor takaful guide compares the options.

Section 15: the recapitalization shakeout

NIIRA gave the industry twelve months to meet new capital requirements, and NAICOM announced completion of the exercise by mid-2026. For buyers the relevance is solvency: the operator standing behind your claims pool must hold real capital, and the exercise pressured thinly capitalized insurers across the market. Among takaful operators, Hilal is 99.99% owned by NGX-listed Cornerstone Insurance and Noor sits within the Noor Group structure; capital backing is now a fair question to put to any operator, and a NAICOM licence that survived recapitalization is itself evidence.

What it all means in practice

What NIIRA does not do

Honest coverage requires the other half of the ledger. NIIRA 2025 does not set prices: contributions remain commercial decisions, and the recapitalization wave may push some pricing up as weaker capacity exits. It does not guarantee your operator's solvency: stronger capital rules raise the floor, but participants should still weigh operator scale and record, which is what our operator comparison exists for. It does not change the fiqh: statutory recognition makes takaful's legal environment sturdier, but Shariah quality still varies operator by operator with scholar disclosure and fund separation, exactly as before. And it does not enforce itself: the 60-day claims rule bites when claimants document their submissions and escalate breaches, not when they wait politely.

The buyer's compliance calendar

• At purchase: verify the operator's NAICOM licence status post-recapitalization, and keep the certificate and payment evidence in one retrievable place.
• For motor owners: carry proof of at least third-party cover; enforcement of the compulsory cover provisions is now real, and takaful certificates satisfy the law fully.
• At claim time: date-stamp every notification and submission, because the 60-day settlement clock and any complaint to NAICOM both run on documented dates.
• At renewal: re-verify the operator's status and reprice the market; consolidation-era markets reward buyers who compare annually.
• If settlement stalls past 60 days: escalate in writing to the operator's complaints channel citing the statutory timeline, then to NAICOM's complaints process with your documented dates.

The theme across all five items is documentation. NIIRA converted several courtesies into rights, and rights are only as strong as the paper trail behind them. A takaful buyer who keeps dates, copies and written answers holds every advantage the new law created; one who relies on phone calls and goodwill holds none of them. The same file doubles as your renewal negotiating position: an operator reviewing a documented, claim-free, promptly paying participant has every commercial reason to price and serve that participant well, and the paper trail is what proves the description fits you.

Frequently asked questions

Does NIIRA make takaful mandatory for Muslims?

No. It makes certain covers compulsory for everyone, motor third-party most prominently, and gives takaful equal statutory standing as a way to meet those obligations. Choosing takaful over conventional remains a personal religious and commercial decision.

My insurer is stalling past 60 days. What do I do?

Put the notification date and the Section 210 deadline in writing to the insurer, then escalate to NAICOM's complaints bureau. The law entitles you to the claim plus monthly compound interest once the deadline passes, and NAICOM can pay from the insurer's statutory deposit.

Is my old policy still valid under the new Act?

Policies written under the old law remain contracts; the new service standards and penalties govern insurer conduct going forward. At renewal you benefit from the full NIIRA framework automatically.

Did NIIRA change takaful's Shariah governance?

The two-layer structure predates NIIRA and continues: each operator needs an Advisory Council of Experts of at least three members with a published annual opinion, overseen by NAICOM's Takaful Advisory Council. Section 200's regulation-making power lets NAICOM tighten this further; nothing issued under it weakens the requirements.

Where can I read the Act itself?

NAICOM publishes the full text of NIIRA 2025 on naicom.gov.ng. For the takaful market it governs, start with our complete takaful guide.