In a bold move that underscores its determination to sanitize Nigeria’s insurance industry, the National Insurance Commission (NAICOM) has mandated all insurance companies and brokers to obtain customers’ National Identification Number (NIN), Bank Verification Number (BVN), and Corporate Affairs Commission (CAC) registration documents before any insurance policy can be issued.
The directive, contained in a circular dated October 22, 2025, and signed by Olugbenga Jaiyesimi, Deputy Director of the Market Conduct & Complaints Bureau on behalf of the Commissioner for Insurance, aligns with Section 64(4) of the newly enacted Nigerian Insurance Industry Reform Act (NIIRA) 2025.
According to the circular, “An insurance underwriter and broker shall not provide or incept any insurance policy, whether for an individual or a corporate entity, without obtaining valid identification and business registration documents as applicable.”
NAICOM explained that the policy seeks to enhance transparency, identity verification, and Know Your Customer (KYC) compliance across the industry, part of ongoing reforms aimed at strengthening the credibility and global competitiveness of Nigeria’s insurance market.
Why This Matters: A Turning Point for the Insurance Sector
The directive comes at a time when Nigeria’s insurance industry is undergoing widespread reform to rebuild public confidence, attract investment, and drive penetration beyond its current rate of less than 1% of GDP.
For years, analysts have blamed weak KYC systems and identity gaps for issues such as fraudulent claims, policy duplication, and regulatory evasion. By linking policy issuance to NIN, BVN, and CAC verification, NAICOM hopes to create a centralized identity framework that will make insurance transactions more secure and traceable.
Experts describe this as a major milestone, one that brings the insurance sector in line with the banking and fintech industries, where digital KYC verification has long been standard practice.
Experts React: “A Necessary Disruption for a Better Future”
Industry stakeholders have largely applauded NAICOM’s directive, describing it as a bold step toward modernization, although not without short-term challenges.
Expert at RiskMatters Consulting, called the policy a “transformational move” that will “elevate trust and reduce systemic fraud.”
“The insurance sector has long needed a comprehensive customer identity system. This directive bridges that gap and will help insurers know who they’re dealing with, individuals or corporate entities. It’s a win for both the regulator and policyholders,” he said.
A member of Credence Insurance Brokers, noted that while the new rules may slow down initial onboarding processes, the long-term benefits outweigh the short-term discomfort.
“Clients may initially find the documentation cumbersome, but once the process becomes routine, it will reduce fraud and enhance credibility. This is the kind of enforcement that builds investor confidence,” Adeola explained.
However, others urged NAICOM to provide clear timelines and digital integration support. Mr. Chijioke Eke, an industry IT consultant, emphasized the need for synergy with national data systems.
“NAICOM must integrate its verification systems with the NIMC, CBN, and CAC databases to ensure seamless authentication. Otherwise, insurers could face operational delays,” he cautioned.
Building a Transparent Future: The NAICOM Reform Vision
The new directive is part of NAICOM’s broader digital and regulatory transformation drive under the NIIRA 2025, which seeks to overhaul market conduct, deepen consumer protection, and strengthen corporate governance standards.
By enforcing these KYC rules, NAICOM aims to achieve several strategic goals:
- Establish a national insurance customer database linked to NIN and BVN.
- Reduce identity-related fraud and false claims.
- Improve data integrity and policy traceability.
- Align Nigeria’s insurance regulation with global anti-money laundering (AML) and counter-terrorism financing (CTF) standards.
Industry observers say the move could also attract more foreign investment into the insurance and insurtech sectors, as international players increasingly demand regulatory environments anchored on strong data governance and transparency.
Reflection: A New Dawn for Compliance and Consumer Trust
Looking back, Nigeria’s insurance industry has often struggled with image perception, seen as slow, opaque, and sometimes unaccountable. But NAICOM’s directive marks a clear break from that past.
By integrating identity verification systems into the core of insurance operations, the Commission is sending a powerful message: the era of anonymous policyholders and shadowy transactions is over.
As Nigeria’s insurance industry evolves into a more transparent and digitally compliant ecosystem, stakeholders agree that this reform “though challenging” is necessary for sustainable growth. It represents not just a regulatory shift, but a redefinition of trust, responsibility, and professionalism in one of Nigeria’s most promising financial sectors.
NAICOM has directed all insurers and brokers in Nigeria to obtain customers’ NIN, BVN, and CAC documents before issuing any policy. Experts applaud the move as a major step toward transparency, fraud prevention, and digital identity integration under the NIIRA 2025 reforms.
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