Insurance Regulators
Overview
When you buy an insurance policy you hand over your premium today for a promise to be paid, perhaps years from now, if disaster strikes. That promise is only as good as the company standing behind it, and the people buying cover cannot inspect an insurer's accounts for themselves. Someone has to make sure the promise will be kept. In Nigeria that someone is NAICOM, the National Insurance Commission, backed by a ring of professional bodies that police the brokers, the loss adjusters and the insurers themselves.
This lesson sets out who guards the Nigerian insurance market and how. You will learn why a regulator is needed at all, the statutory powers of NAICOM, and the distinct jobs of the NIA, the NCRIB, ILAN and the CIIN. You will also meet the new law that reshaped the industry in 2025, the Nigerian Insurance Industry Reform Act, and see exactly where each body sits in the chain of command.
Objectives
- Explain why the insurance industry requires a regulator
- State the statutory role of the National Insurance Commission (NAICOM) in supervising insurers
- Describe the functions of the Nigerian Insurers Association (NIA)
- Describe the functions of the Nigerian Council of Registered Insurance Brokers (NCRIB) and the Institute of Loss Adjusters of Nigeria (ILAN)
- Explain the role of the Chartered Insurance Institute of Nigeria (CIIN) in professional education and standards
Mind map
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Flashcards
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Lesson Note
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Lesson Evaluation
Congratulations on completing the lesson on Insurance Regulators. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- The statutory regulator of the insurance industry in Nigeria is the: A. Nigerian Insurers Association B. National Insurance Commission C. Chartered Insurance Institute of Nigeria D. Nigerian Council of Registered Insurance Brokers Answer: B
- The professional and educational body that conducts examinations for insurance practitioners in Nigeria is the: A. NCRIB B. ILAN C. CIIN D. NIA Answer: C
- An insurance broker who wishes to practise in Nigeria must be registered with the: A. NAICOM B. NCRIB C. NIA D. CIIN Answer: B
- Which of the following is a self-regulatory body for insurance companies? A. ILAN B. NCRIB C. NIA D. NAICOM Answer: C
- The current principal statute governing insurance business in Nigeria is the: A. Insurance Act 2003 B. NAICOM Act 1997 C. Nigerian Insurance Industry Reform Act 2025 D. Insurance Companies Act 1961 Answer: C
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Revision Questions
Wondering what past questions for this topic looks like? Here are a number of questions about Insurance Regulators from previous years
Question 1 Report
(a) State three roles of National Insurance Commission.
(b) List and explain three methods of providing indemnity.
Answer Details
(a) Three roles of the National Insurance Commission (NAICOM)
- To regulate, supervise and control the insurance business in Nigeria, ensuring companies operate within the law.
- To register, license and where necessary cancel the registration of insurers, reinsurers, brokers and loss adjusters.
- To protect the interests of policyholders and the public by ensuring insurers remain solvent and settle genuine claims, and to approve rates, terms and conditions of insurance.
(b) Three methods of providing indemnity
- Cash payment: The insurer settles the claim by paying the insured a sum of money equal to the amount of the loss, this being the commonest method.
- Repair: The insurer restores the damaged property to its former condition by arranging and paying for its repair, as is common in motor insurance.
- Replacement: The insurer provides a new article in place of the one lost or damaged, restoring the insured to his former position, as sometimes done with glass or jewellery.
- Reinstatement: The insurer rebuilds or reinstates property, for example a building destroyed by fire, to its pre-loss condition.
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