The Insurance Reform Bill, currently awaiting its second reading in the Senate, proposes severe penalties for unlicensed insurance operations. According to Section 10 of the bill, any company, firm, or combination of persons, along with their principal officers, engaging in the insurance business without proper licensing will be committing an offense. Upon conviction, they could face a fine of ₦50,000,000.00 or imprisonment for up to two years, or both.
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For individuals, the penalties are similarly stringent. The bill stipulates that any person transacting insurance business without a license could be fined ₦25,000,000.00, face up to two years in prison, or both.
Industry observers believe that if the bill is passed and enforced, these sanctions will significantly reduce the proliferation of fake insurance policies, which have long plagued the sector. They estimate that billions of Naira are lost annually due to counterfeit policies, with over 10 million vehicles on Nigerian roads carrying fraudulent motor insurance policies.
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Experts are calling for the swift passage of the Reform Act and its strict enforcement to protect the industry and consumers from the detrimental effects of fake insurance.
