A probe launched by the House of Representatives into alleged financial infractions by 25 insurance companies has unsettled the sector, sparking debates over regulatory jurisdiction, legal propriety, and the potential economic fallout from a public inquiry into one of Nigeria’s key financial industries.
Last week, the House of Representatives Subcommittee on Capital Market and Other Institutions commenced investigations into the alleged non-remittance of revenue to the Federal Government by several insurance firms, many of which are publicly listed entities. During a session at the National Assembly, the committee’s chairman, Kwamoti Laori, said preliminary findings revealed widespread infractions relating to financial reporting, premium remittance, claims settlement, and policy issuance.
According to Laori, the investigation followed a formal petition submitted to the committee outlining significant statutory violations. He emphasized that the objective was to recover lost revenue and hold firms accountable.
“This committee is handling a petition based on infractions by these insurance companies regarding non-compliance with statutory provisions,” Laori said. “These breaches have cost the Federal Government hundreds of billions of naira. We are inviting the companies to either confirm or refute the liabilities assigned to them.”
He criticized attempts by some of the firms to seek legal redress, describing the move as a bid to obstruct parliamentary work. “We expect the chief executives to appear in person. Sending representatives who can’t respond to key questions is unacceptable,” Laori added.
Laori also took a swipe at the sector’s regulator, the National Insurance Commission (NAICOM), stating that more effective oversight from the commission could have prevented such developments. “If the regulator had been more diligent, perhaps we wouldn’t be here,” he noted.
In response, the Nigerian Insurers Association (NIA) defended the decision of the firms to challenge the probe in court, citing legal counsel. The association said the court action was aimed at seeking clarity on the legality of the committee’s actions and to protect regulatory independence.
“The Association wishes to clarify that all responses and actions by the NIA and affected firms were taken based on legal advice. The court case seeks to determine whether the committee’s current posture infringes on the exclusive jurisdiction of regulatory bodies like NAICOM, the Securities and Exchange Commission, and the Nigerian Exchange,” the association said.
The NIA stressed that while it remains open to engagement with all arms of government, such collaboration must respect institutional mandates and constitutional boundaries.
Industry stakeholders have also raised concerns over what they describe as a media trial that could damage an already fragile public perception of insurance in Nigeria. Despite a population of over 200 million, insurance penetration in the country remains below 1%. Experts attribute this to widespread distrust, low awareness, and doubts over the reliability of insurers.
Some observers argue that the public probe could further erode trust in the system, hurt investor sentiment, and undermine efforts to expand financial inclusion. “The impact of this kind of publicity is broad. It discourages policyholders, unsettles investors, and weakens confidence in an already underdeveloped market,” said one sector analyst.
Many have pointed out that the firms under investigation are already regulated by multiple statutory bodies and are publicly accountable. They argue that summoning them en masse before a legislative committee creates a perception of blanket guilt, which could be damaging for the sector’s reputation.
A former president of the Chartered Insurance Institute of Nigeria noted that issues of compliance should be routed through NAICOM, which has oversight over the financials and operations of all registered insurance firms.
“If there are concerns about infractions, the appropriate first step should be to engage the regulator. Probing 25 firms at once gives the impression of a sector-wide indictment, which could distract from current efforts to rebuild public confidence,” he said.
Another financial and governance expert warned that the investigation, if not properly managed, could undermine regulatory institutions and create an atmosphere of uncertainty. “Legislative oversight is crucial, but it must not override the functions of established regulators. Sections of the Insurance Act vest specific powers in NAICOM. No parliamentary committee should bypass that framework to conduct direct interventions,” he said.
He described the court challenge filed by the insurance firms as a commitment to due process, adding that robust institutions must be supported, not politicized.
He also suggested that collaboration between the National Assembly and regulatory bodies could produce better outcomes. “Instead of launching overlapping investigations, lawmakers should focus on reviewing policies and strengthening legal frameworks. Engaging NAICOM through formal reports and progress updates would ensure oversight without compromising regulatory autonomy,” he added.
In the face of growing scrutiny, industry stakeholders say the way forward involves a commitment to transparency, improved governance, and a balanced approach to oversight. They advocate for voluntary compliance with global best practices and stronger internal systems to rebuild credibility.
Meanwhile, NAICOM has reaffirmed its commitment to ensuring compliance, strengthening supervisory mechanisms, and supporting a stable insurance market that protects the interests of consumers, businesses, and the Nigerian economy at large.
