NAICOM unveils IPPF’s guidelines to safeguard insurance customers

Barbara Bako, Abuja.

The National Insurance Commission (NAICOM) has issued comprehensive guidelines for the collection, management, and administration of the Insurance Policyholders’ Protection Fund (IPPF), aimed at strengthening policyholder protection in Nigeria’s insurance industry.

In a circular issued by the Commission said the guidelines were issued pursuant to the Nigerian Insurance Industry Reform Act 2025 to provide a clear regulatory framework for the operation of the Fund.

NAICOM explained that the IPPF is designed as a statutory safety net to protect policyholders and beneficiaries against losses arising from the distress or insolvency of licensed insurers and reinsurers.

Under the new framework, all insurers and reinsurers are required to contribute 0.25 per cent of their net premium income annually to the Fund.

The Commission will also contribute 0.25 per cent of the balance in the Security and Insurance Development Fund.

The guidelines stipulate that contributions must be paid into designated accounts with deposit money banks not later than June 30 each year, based on audited financial statements for the preceding year.

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NAICOM further directed that insurers must submit their IPPF assessment returns for the 2025 financial year on or before May 31, 2026, while subsequent submissions will follow timelines outlined in the guidelines.

According to the Commission, the Fund will be used primarily to settle claims and obligations of insurers that are unable to meet their liabilities due to insolvency or licence cancellation.

Disbursements from the Fund will be made as loans to affected insurers, subject to regulatory approval and strict conditions.

To ensure transparency and accountability, the Fund will be managed by an independent fund manager and overseen by an IPPF Committee comprising representatives of the Commission and the insurance industry.

The guidelines also provide for strict enforcement measures, including sanctions and possible licence cancellation for insurers that fail to comply with contribution requirements or reporting obligations.

NAICOM emphasised that the initiative is part of broader reforms to enhance confidence in the insurance sector, improve claims settlement, and align Nigeria’s regulatory framework with global best practices.