Doing Business in Nigeria; Registration of Insurance Companies

An insurance business falls into the category of businesses that require other approvals apart from the incorporation of the company with the Corporate Affairs Commission. 

The two basic legislations that govern the Insurance business in Nigeria are; Insurance Act, No. 1 of 2003 and the National Insurance Commission (NAICOM) Act, Cap N53, LFN,2004.

THE REGISTRATION PROCESS FOR AN INSURANCE COMPANY 

1. A company must be registered under part A of CAMA, ie, an insurance company must be incorporated as a company in Nigeria.
2. The company must be registered with NAICOM which imposes the conditions for the registration as it deems fit.
3. To be registered, an applicant shall forward an application for registration as an insurer to NAICOM in the prescribed form. 
4. An application shall be accompanied by a business plan and such other documents or information required by the regulatory body.
5. However you should note that the registration procedure for a life insurance business differs from the procedure of a general insurance business. 

• The conditions for registration of an insurance company as prescribed in Section 6 of the insurance Act are as follows;
• The class or category of insurance business shall be conducted in accordance with sound insurance principles.
• Paid-up requisite share capital and statutory deposit for the relevant class of insurance business
• The requisite statutory deposit has been paid to the Central Bank of Nigeria and the applicant has submitted a certificate from the Bank to NAICOM. 
• Arrangements relating to reinsurance treaties in respect of the class of insurance business to be transacted are adequate and valid;
• Proposal forms, terms and conditions are in order and are acceptable;
• Competent and professionally qualified persons to manage the company 
• Applicant shall not have in its employment a person disqualified from being appointed by the insurer
• The directors have attended the promoters interview and are persons who have not been involved in or been found guilty of fraud 
• Name of the applicant is not likely to be mistaken for the name of any other insurer who is or has been an insurer or so nearly resembling that name, as to be calculated to deceive;
• Payment of prescribed fee for registration 
• It is in the public interest that the applicant is registered
• Where the class of insurance is other than life insurance business, the application is for the purposes of transacting not less than three classes of insurance business
• Submission of a satisfactory business plan and feasibility study of the insurance business to be transacted within the next succeeding five years from the date of the application;
• In the case of reinsurance business, in addition to all of the above, must comply with any other condition which may be specified from time to time by the appropriate authorities. 

For more information on setting up Insurance Companies and other Businesses in Nigeria, click here to order a copy of our book “Doing Business in Nigeria: Basic Entry/Licensing Requirements and Permits in Selected Sectors” (2017).