The National Insurance Commission (NAICOM) has released guidelines for the Insurance Policyholders’ Protection Fund (IPPF), covering its collection, management, and administration.
The Nigerian Insurance Industry Reform Act of 2025 mandates that insurers and reinsurers contribute 0.25 per cent of their gross premium income to the IPPF.
Additionally, 0.25 per cent of the Security and Insurance Development Fund’s balance as of December 31 of the preceding year, after fulfilling the Fund’s obligations under the Act, will also be paid into the IPPF which is to be used to resolve distress and insolvencies of licensed insurers or reinsurers and payment of claims admitted by or allowed against a licensed insurer or reinsurer which remains unpaid by reason of insolvency or cancellation of the licence of the insurer or reinsurer.
NAICOM, through Deputy Director John Falade, issued the guidelines to all insurance institutions, citing authority under Section 212 of the Nigerian Insurance Industry Reform Act, 2025, and other applicable laws and regulations.
The guidelines offer a clear and thorough framework for collecting, managing, and administering the Fund. They aim to provide clarity, guidance, and make compliance easier for the Fund, which serves as a statutory safety net to protect insurance policyholders from the distress or insolvency of licensed insurers or reinsurers, and also includes directions for insurers or reinsurers on reimbursing loans.
The commission expects the IPPF Assessment Returns for the year 2025, covering the collection and payment of contributions into the Fund since July 31, 2025, when the NIIRA 2025 was signed into law by the President, be submitted to the Commission not later than May 31, 2026, while subsequent submissions shall be in line with Section 4.3 of the Guideline on Insurance Policyholders Protection Fund.
The objectives of the guidelines, the Commission said, include the protection of policyholders and beneficiaries covered under an insurance policy; ensure timely and accurate collection of contributions to the Fund; establish sound management and investment practices for the Fund; provide procedures for disbursement and recovery of loans from the Fund, and promote transparency, accountability, and governance in the administration of the Fund.
The guidelines apply to all insurance and reinsurance companies in Nigeria; the Insurance Policyholders’ Protection Fund Committee, and the Fund Manager appointed by the Commission to independently administer the fund under the oversight of the Committee.
However, the Commission said that nothing in the guidelines shall stop or prevent it from exercising its regulatory and supervisory oversight.
