A Professional Assessment of the Legal Framework for Insurance Regulation and Consumer Protection Under the Nigerian Insurance Act

Nigeria's insurance sector is governed by the Insurance Act 2003, supplemented by National Insurance Commission regulations, and a comprehensive recapitalisation directive, yet policyholder protection standards and regulatory enforcement quality have been criticised as inadequate. This study provides a professional assessment of the insurance regulatory and consumer protection framework under the Insurance Act, evaluating solvency requirements, claims settlement obligations, market conduct supervision, and the resolution of policyholder disputes. Data were gathered through structured interviews with NAICOM officials, 15 insurance company compliance officers, and 20 policyholders who had experienced claims disputes in Lagos, Abuja, and Port Harcourt. NAICOM enforcement action records and complaints data from 2019 to 2023 were analysed. Results indicate that claims repudiation rates are excessively high in motor and health insurance, driven by poorly drafted policy exclusions and inadequate post-sales documentation. NAICOM's market conduct supervisory capacity is limited relative to the industry's size. Premium collection from government-mandated insurance programmes (such as third-party motor insurance) is well below statutory requirements. The study concludes that insurance regulation requires strengthened market conduct supervision, mandatory claims settlement timelines, and enhanced consumer dispute resolution mechanisms. Recommendations include an Insurance Consumer Tribunal, mandatory electronic policy delivery and acknowledgement, and NAICOM annual market conduct examination reports for all licensed insurers.

Keywords: insurance regulation, NAICOM, policyholder protection, claims settlement, Insurance Act