Seun Timi-Koleolu and Eniola Sogbesan
Introduction
In furtherance of its regulatory powers, the National Insurance Commission (the “Commission”) in its circular dated July 30, 2025 issued the Guidelines for Insurtech Operations in Nigeria 2025 (the “Guidelines”). The Guidelines provide a comprehensive regulatory framework for the safe, responsible, and efficient deployment of Insurtech solutions by licensed insurance entities and technology-driven firms operating in Nigeria.
Effective August 1, 2025, these Guidelines introduce key provisions—including licence categorization, minimum capital requirements, and the scope of permissible activities. which this newsletter sets out.
1. What is Insurtech?
The Guidelines define Insurtech as follows – “Insurtech is a combination of the words “insurance” and “technology”. Insurtech refers to an institution that uses technological innovations to provide insurance services efficiently and effectively”. Accordingly, it may be inferred from the Guidelines that where technology is actively used in the delivery of insurance services, such service provider may be considered to be an Insurtech service provider.
2. License Categorization and Permissible Activities
The Guidelines require all Insurtech service providers to obtain a license from the Commission. Under the Guidelines, Insurtech licenses are categorised into two namely; Standalone Insurtech and Partnering Insurtech.
a.Standalone Insurtech: These are entities that operate independently and offer insurance products or services directly to consumers. The Guidelines permit Standalone Insurtech to provide certain types of insurance including Health insurance, Term assurance, Motor insurance, Agric insurance and such other insurance that may be specified in its licence. The Guidelines, however, specifically exclude special risk products such as Oil and Gas Insurance, Marine and Aviation Insurance, Retire Life Annuity, and Insurances of Government Assets and Liabilities for Ministries, Departments, and Agencies from the permissible activities of Standalone Insurtech.
b.Partnering Insurtech: A Partnering Insurtech is a corporate entity that collaborates with insurance institutions to improve or complement existing operations. The scope of permissible activities for a Partnering Insurtech under the Guidelines include the following:
- marketing and distribution of insurance products and services
- customer services
- policy administration
- product management
- claims management
- insurance business aggregation
- crop cutting, data collection and yield calculation
- such other services as may be stipulated by the Commission from time to time.
While a Partnering Insurtech license is valid for 4 years, the Guidelines are silent on the duration of the license of a Standalone Insurtech. It is hoped that the Commission will proffer clarity in this respect.
3. Impermissible Activities
The Guidelines expressly prohibit an Insurtech from engaging in the following activities:
- unlicensed insurance operations.
- ineligible insurance business.
- unapproved products and pricing models.
- unsupervised automated claims rejections.
- misleading marketing and sales practices.
- crypto based transactions.
- data privacy violations.
- unapproved cross-border digital sales.
- manipulative platform design.
- physical marketing of insurance products and other activities that may be prohibited by extant regulations and directives of the Commission.
4. Minimum Share Capital Requirements & Annual Levy
a. Standalone Insurtech
Under the Guidelines, a Standalone Insurtech is required to maintain a minimum share capital of, the higher of:
- N1,500,000,000 per category of general or non-life insurance business or risk-based capital determined from time to time by the Commission
- N1,000,000,000 per category of life insurance business or risk-based capital determined from time to time by the Commission; or
- such other amount as may be prescribed by the Commission from time to time.
b. Partnering Insurtech
In accordance with the Guidelines, a Partnering Insurtech must maintain a minimum share capital of:
- N10,000,000 as at the date of application and shall continue to maintain the same throughout the license period and
- professional Indemnity of not less than N100,000,000 or as may be prescribed by the Commission from time to time.
c. Annual Levy
In addition to the share capital requirements, upon approval by the Commission, a Standalone Insurtech is required to pay an annual levy of 1% of its annual gross premium income or N5,000,000 whichever is higher. While a Partnering Insurtech is required to pay an annual levy of 1% of its annual gross commission income and remuneration fee or N500,000 whichever is higher.
5. Corporate Governance Requirements.
In line with global best practices, the Guidelines outline specific educational and professional qualifications required of senior management of Insurtechs.
a. Managing Director/Chief Executive Officer
In more specific terms, the Managing Director/Chief Executive Officer of a Standalone Insurtech is to have the following qualifications:
- first degree in insurance or Computer Science or related fields from a recognized academic institution, or
- proficiency certification in technology or related field from accredited training institutions, or
- professional qualification in insurance from a recognized institution, and
- 5 years cognate work experience or as the Commission may prescribe from time to time.
In addition, the MD/CEO is to satisfy the conditions of fit and proper persons set by the Commission and the appointment of the MD/CEO is subject to the prior approval of the Commission.
b. CTO/COO/Executive Director, Technology
The CTO/COO/Executive Director, Technology of a Standalone Insurtech is to satisfy the following qualifications:
- hold a recognized professional qualification in insurance with not less than 10 years post qualification experience in the insurance industry, 7 of which must be at a senior management level, or
- hold a first degree or its equivalent from a recognized institution and with not less than 15 years post qualification experience, 10 of which must be at senior management level in the Technical Department of an insurance or reinsurance company.
Additionally, the CTO/COO/ED. Tech is to fulfil the conditions of fit and proper persons set by the Commission and the appointment is subject to the prior approval of the Commission.
6. Remedial Measures & Sanctions
In accordance with its regulatory powers, the Guidelines empower the Commission to undertake remedial measures against an erring Insurtech. In more specific terms, some remedial measures the Commission may take include – intervention measures, inspection and investigation.
The Commission is also empowered to sanction any Insurtech that is in violation of the Guidelines. Some sanctions the Commission may take include:
- cancellation of the licence granted to an Insurtech on the observation of any infraction or non-compliance with the Guidelines.
- imposition of administrative sanctions on an Insurtech for inappropriate actions/inactions or corporate misconduct.
- in cases of violation of the provisions of extant laws, impose administrative penalties depending on the nature and gravity of the infraction.
- initiation of criminal proceedings against an Insurtech or any insurance institution who partners with an unlicensed Insurtech.
7. Additional Requirements
In addition to the foregoing, the Guidelines make robust provisions on matters related to standards for computer network and internet, prudential and market conduct requirements, business obligations, financial reporting and customer complaints redress mechanism. The continuous compliance with these requirements is essential for an Insurtech to maintain its license with the Commission.
Conclusion
By recognizing the expanding role of technology and innovation in the delivery of insurance services, the Guidelines represent a proactive regulatory approach in addressing potential market expansion opportunities. With appropriate interaction between the Commission and prospective Insurtech companies, it is hoped that the Guidelines will fulfill the overarching objective of supporting Nigeria’s digital ecosystem, business and economy.
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