The Federal Government has moved to strengthen confidence in Nigeria’s insurance sector by inaugurating the Insurance Policyholders’ Protection Fund (IPPF) Committee, a major pillar of the newly enacted Nigerian Insurance Reform Act (NIIRA) 2025.

The scheme is designed to guarantee policyholders’ claims in the event of insurer stress or insolvency.

Speaking at the inauguration ceremony, Minister of Finance and Coordinating Minister of Economy, Taiwo Oyedele, said the establishment of the fund represented a significant milestone in the ongoing reform of Nigeria’s insurance sector and reflects the Federal Government’s commitment to strengthening consumer protection and restoring public trust in insurance.

He said the insurance sector remained a vital component of modern economies because of its role in risk management, financial protection and capital mobilisation.

He noted that despite the industry’s vast potential, Nigeria’s insurance penetration remains low, stressing that stronger regulation, improved transparency and policyholder protection are necessary to unlock the sector’s contribution to gross domestic product (GDP).

“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 GDP,” Oyedele said.

The minister explained that the IPPF would serve as a financial safety net for policyholders, ensuring that claims obligations are met promptly in cases where insurers become insolvent or unable to meet obligations.

He added that the scheme would enhance confidence in the insurance ecosystem, reduce systemic risks and align Nigeria’s insurance market with international best practices on consumer protection.

The inauguration of the committee marked one of the first major implementation steps under NIIRA 2025, widely regarded as the most comprehensive reform of Nigeria’s insurance industry in decades.

The act introduces a risk-based regulatory framework aimed at strengthening oversight, improving market discipline, promoting innovation and creating a more investor-friendly insurance environment.

Commissioner for Insurance, Olusegun Omosehin, described the IPPF as a statutory protection mechanism designed to reinforce consumer confidence and preserve market stability.

Omosehin said the fund would not only compensate policyholders in the event of insurer failure but also strengthen trust in insurance as a reliable financial promise.

“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 and reinforces insurance trust,” he said.