NAICOM sets up policyholders protection fund committee

By Henry Uche

In a bid to strengthen confidence in Nigeria’s insurance market and deepen consumer protection, the Commissioner for Insurance and Chief Executive Officer, National Insurance Commission, Olusegun Ayo Omosehin, has charged the newly inaugurated Insurance Policyholders’ Protection Fund (IPPF) Committee to ensure that the Fund is credible, well governed, and effective when policyholders need it most.

The Commissioner who gave this charge in Abuja over the weekend clearly stated that the fund shall be used for the purpose of resolving distress and insolvencies of licensed insurers and Reinsurers or as a result of cancellation of license.

In line with the statutory provision, the objectives of the six-man committee are: to ensure protection of policyholders and beneficiaries covered under an insurance policy in Nigeria; to ensure timely and accurate collection of contributions to the Fund, and to establish sound management and investment practices for the Fund.

Other targets set before the committee include to provide procedures for disbursement and recovery of loans from the Fund, and to promote transparency, accountability, and governance in the administration of the Fund.

“With the establishment of the Insurance Policyholders Protection Fund Committee pursuant to Section 212 of the Nigerian Insurance Industry Reform Act (NIIRA 2025), we are moving from policy intent to institutional protection that gives policyholders greater assurance and gives the market greater credibility” Omosehin noted.

The IPPF is a statutory safety net for policyholders when an insurer becomes insolvent or is unable to meet its obligations. Its value goes beyond compensation: it protects households and businesses from avoidable loss, reinforces trust in insurance as a reliable promise, and helps preserve stability across the market.

NIIRA 2025 reflects the Federal government’s commitment to a stronger, more resilient, and consumer-centric insurance industry. The legal foundation is now in place; the task ahead is disciplined execution.

The Commissioner charged the committee on financial discipline, fair and credible protection, transparency and accountability, saying: “Ensure timely contributions, prudent stewardship of assets, and sound controls that protect the Fund’s long-term sustainability. Establish transparent processes that support prompt claims decisions, consistent administration, and public confidence in the Fund. Also maintain clear reporting and high governance standards so that industry stakeholders and the public can trust the Committee’s decisions.

“You have been selected because of your accomplishments, expertise and integrity, but those qualities must now translate into results. The credibility of the IPPF will be measured by the discipline of its governance, the fairness of its decisions, and the confidence it inspires across the market” the Commissioner informs.

He added that NAICOM remains committed to providing the regulatory oversight, technical support, and institutional backing required for the committee to succeed. At the same time he cautions that the Fund belongs to the insurance industry, insurance consumers, and must therefore be administered with independence, professionalism, and a clear focus on policyholder protection.

The Guidelines, he affirmed, are designed to protect policyholders while preserving the solvency and competitiveness of insurers. He noted that the committee is expected to uphold that balance through disciplined judgment, operational readiness, and unwavering professionalism.

The regulator stressed that the inauguration of the Committee is a clear signal to the market and the public that consumer protection is central to the future of insurance in Nigeria. If implemented with credibility and consistency, the IPPF will strengthen trust, support deeper market participation, and advance the broader goals of financial inclusion and economic stability.

“Your inauguration today is not ceremonial; it is the start of a serious governance responsibility. The committee’s mandate is to ensure that the Fund is sustainably financed, professionally managed, and capable of delivering timely and fair protection to policyholders.

“I urge you to approach this assignment with urgency and a clear sense of duty to Nigerian public. Millions of Nigerians rely on insurance to protect their homes, businesses, health, and future, and they will judge this Fund by its readiness to respond fairly and effectively when it is called upon.

“I charge you to justify this confidence through transparent governance, sound judgment, and a steadfast commitment to protecting policyholders and strengthening the market,” he said.

At the inauguration, the Minister of Finance and Coordinating minister of the economy, Taiwo Oyedele, said the “Federal Government remains fully committed to support reforms that strengthen financial sector stability and protect Nigerian citizens.”

Acknowledging the insurance sector as a critical pillar of any modern economy, the Minister notified that the establishment of the Committee demonstrates Federal government’s resolve to safeguard the interests of policyholders and ensure that, in the unlikely event of insurer distress or failure, policyholders are protected and their claims obligations are met in a timely and orderly manner.

“In Nigeria today, the insurance sector holds vast untapped potential. With strengthened regulatory frameworks and increased public confidence, the industry is well-positioned to play a more strategic role in infrastructure financing, financial inclusion, and overall contribution to Gross Domestic Product (GDP).

“This initiative sends a clear message that the Nigerian insurance industry is secure, reliable, and responsive to the needs of its stakeholders.”

Oyedele who was represented by Mr. Raymond Omachi, Permanent Secretary of the Federal Ministry of Finance, urged the committee to discharge their responsibilities with utmost professionalism, integrity, and dedication, noting that the credibility and effectiveness of the IPPF will depend on its commitment to excellence and stewardship of the mandate.

He assured that the federal government will continue to collaborate with NAICOM, industry stakeholders, and other regulators to deepen insurance penetration nationwide; enhance regulatory capacity and institutional efficiency, promote innovation through technology and inclusive insurance solutions and ensure that the insurance sector contributes meaningfully to national economic development.

“Today’s event is not merely an inauguration, it is a symbol of progress, a commitment to accountability, and a foundation for a more resilient insurance industry. With the implementation of NIIRA 2025 and the operationalisation of the IPPF, we are building a system that protects citizens, strengthens confidence, and supports sustainable economic growth. It is my firm belief that, together, we will continue to transform Nigeria’s insurance sector into a globally competitive and trusted industry,” he avowed.

Members of the committee are: Mr. Oye Hassan-Odukale, Chairman; Dr. Usman Jankara Jimada, member; Mrs. Yetunde Ilori, member; Mrs. Oluwatoyin Charles, member; Mr. Babatunde Fajemirokun, member and Meristem Wealth Management Ltd, as the Fund Manager/Secretary.