The National Insurance Commission (NAICOM) has inaugurated the Insurance Policyholders’ Protection Fund (IPPF) Committee to protect policyholders from losses linked to failed insurance firms and boost confidence in Nigeria’s insurance industry.
Speaking during the inauguration ceremony in Abuja, the Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, described the fund as a statutory safety net designed to protect policyholders whenever an insurer becomes insolvent or is unable to meet its obligations.
Omosehin said the establishment of the Insurance Policyholders’ Protection Fund Committee under Section 212 of the Nigerian Insurance Industry Reform Act 2025 represents a major milestone in deepening consumer protection and enhancing trust in the insurance market.
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According to him, the fund will be used to resolve distress and insolvencies involving licensed insurers and reinsurers, including situations arising from the cancellation of operating licences.
“The IPPF is a statutory safety net for policyholders when an insurer becomes insolvent or is unable to meet its obligations. Its value goes beyond compensation; it protects households and businesses from avoidable loss, reinforces trust in insurance as a reliable promise, and helps preserve stability across the market,” Omosehin said.
Omosehin explained that the committee is expected to ensure the timely collection of contributions to the fund, establish prudent management and investment practices, and implement transparent procedures for disbursement and recovery processes.
He further charged members of the committee to uphold financial discipline, transparency, accountability, and fairness in claims administration.
“The credibility of the IPPF will be measured by the discipline of its governance, the fairness of its decisions, and the confidence it inspires across the market,” Omosehin added.
Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, represented by the Permanent Secretary of the Federal Ministry of Finance, Raymond Omachi, described the inauguration as a significant step in implementing the Nigerian Insurance Industry Reform Act 2025.
Oyedele noted that the reform law introduced a modern risk-based regulatory framework aimed at strengthening oversight, promoting transparency, encouraging innovation, and improving protection for policyholders.
“The establishment of the IPPF Committee demonstrates our resolve to safeguard the interests of policyholders and ensure that, in the unlikely event of insurer distress or failure, policyholders are protected, and their claims obligations are met in a timely and orderly manner,” he said.
Oyedele added that the fund would enhance confidence in the insurance ecosystem, mitigate systemic risks, and align Nigeria’s insurance industry with global best practices.
The Executive Vice Chairman and Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), Tunji Bello, represented by the FCCPC Director of Corporate Affairs, Ondaje Ijagwu, said many consumers had suffered financial losses due to inadequate protection mechanisms when insurance firms collapsed.
“In the insurance sector, many policyholders have fulfilled their obligations by paying premiums consistently, only to face uncertainty or financial loss when insurers became insolvent,” he stated.
Bello noted that the new fund would reduce the burden on consumers during institutional failures while strengthening public confidence in the insurance sector.
Meanwhile, the Chairman of the Nigerian Insurers Association, Kunle Ahmed, disclosed that insurers initially opposed the creation of the fund due to concerns over the financial implications for operators.
Ahmed said the industry later embraced the initiative after recognising its importance in rebuilding public trust and addressing the impact of failed insurance firms on policyholders.
He recalled encounters with policyholders who suffered severe losses following the collapse of insurance companies, stressing that such experiences underscored the need for a protection fund within the sector.
