A recently uncovered provision in the newly signed Insurance Reform Act 2025—Section 49—is sending shockwaves across Nigeria’s insurance landscape. Referred to in industry circles as the “secret code”, Section 49 contains regulatory implications that may redefine how insurance companies operate, report, and respond to claims, particularly in the digital and reinsurance space.
Though the broader Act was celebrated for promoting transparency, consumer protection, and digital transformation in the sector, Section 49 was buried deep in the legal text and only came to light after analysts and legal practitioners flagged its potent clauses during recent stakeholder briefings organized by the National Insurance Commission (NAICOM).
What Is in Section 49?
Section 49 introduces “Real-Time Reconciliation and Claims Accountability”, mandating all licensed insurers and reinsurers to integrate blockchain-based reporting systems into their operations within six months of the Act’s implementation. Failure to comply will attract daily regulatory penalties and potential license suspension.
Specifically, it states:
“All insurance and reinsurance firms must deploy real-time claim settlement tracking systems, accessible to regulators and customers alike, using technologies approved by the Commission. Non-compliance shall constitute a regulatory breach under this Act.”
The section also empowers NAICOM to conduct random system audits without prior notice, and mandates external validation of reserves and claim liabilities every quarter.
Industry Reaction
Some insiders view Section 49 as a wake-up call. According to Mr. Jimalex Orjiako, Executive Director at Consolidated Hallmark Insurance, “This clause could either be a masterstroke for transparency or a bureaucratic trap. The fact that it was not heavily publicized raises questions.”
The CEO of a well known insurance company, described it as “a necessary disruption,” arguing that the Nigerian insurance industry needs a tech-led shake-up to regain public trust.
Regulatory Perspective
NAICOM’s Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, has confirmed the provision’s existence and said the Commission will release implementation guidelines in May. He emphasized that the section is not a trap, but rather a compliance catalyst for the digital era.
“We expect full cooperation from all players. The age of post-event accountability is over. We are moving to a live-data ecosystem,” Omosehin said during a media briefing in Abuja.
What Operators Must Do Now
- Review Internal Systems – Insurance firms must assess their IT infrastructure and begin integration planning immediately.
- Hire Legal Technologists – Specialized legal and blockchain consultants may be needed to interpret and implement the requirement.
- Prepare for Disclosure – Real-time claims data will soon be viewable by customers and regulators, meaning insurers must clean up legacy backlogs.
- Engage NAICOM Early – Firms are encouraged to seek clarification now, not after sanctions begin.
Section 49 may not have been spotlighted during the Act’s signing, but it now stands as the defining clause that could either modernize or destabilize operations across Nigeria’s insurance space. Whether seen as a compliance burden or a digital breakthrough, one thing is clear: operators ignore it at their peril.
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