NAICOM backs competitive Lagos insurance scheme as reforms take hold
Nigeria's insurance regulator has endorsed a new mandatory building insurance scheme in Lagos, signalling the first state-level enforcement of a 2025 reform law that expands compulsory coverage and tightens capital rules.
The National Insurance Commission formally backed the launch of the Lagos State Building Insurance Scheme, conditioning its support on a framework that is open to all licensed operators. Commissioner for Insurance Olusegun Omosehin, represented by Deputy Commissioner Ekerete Ola Gam-Ikon, stated the regulator would insist on a competitive architecture rather than a closed system.
Omosehin outlined three specific regulatory commitments to secure the scheme's integrity. He pledged that policies would only be underwritten by NAICOM-supervised firms, promised a crackdown on fake certificates and unlicensed operators, and reaffirmed the demand for an accessible market structure. "A compulsory scheme is only as strong as the integrity of the cover behind it," he said.
The Lagos programme is the first state-level translation of the Nigerian Insurance Industry Reform Act 2025. This legislation mandates insurance for public buildings and constructions above a prescribed height, aiming to protect owners, occupants and third parties from financial losses. Omosehin noted that Lagos's approach could serve as a template for other Nigerian states seeking to enforce these national requirements.
The scheme's launch coincides with NAICOM's broader push to overhaul how insurers are capitalised and supervised. The commission recently appointed Ernst & Young as Consulting Actuary to finalise a Risk-Based Capital framework. This project aims to tie capital requirements directly to the specific risk profiles of individual operators, a move designed to strengthen overall financial stability and policyholder protection.
For market participants, the combination of compulsory building coverage and a risk-based capital regime represents a structural shift in Nigeria's insurance sector. While the mandatory scheme creates a new pool of premiums, the regulator's insistence on competitive access prevents monopolistic capture by a select group of underwriters. Omosehin urged insurers to capitalise on this by prioritising prompt claims settlement to build the public trust necessary for the expanded market to function.
