Preliminary and Commissions

(a)            a friendly society, that is an association of persons established with no share capital for the purpose of aiding its members or their dependents, where such association does not employ any person whose main occupation -

(i)             is the canvassing of other persons to become members of the association,

(ii)            is the collecting of contributions or subscriptions towards the funds of the association from its members; or

(b)            a pension fund or a provident fund; or

(c)            a company or any other body (whether corporate or unincorporated) or person whose business is established outside Nigeria, engaged solely in reinsurance transactions with an insurer authorised or pursuant to the provisions of this Decree to carry on any class of insurance business, but not otherwise howsoever.

(a)             life insurance business; and

(b)             general insurance business.

(2)             Life insurance shall be sub-divided into the following categories, that is -

(a)             individual life insurance business; and

(b)             group life insurance business.

(3)             General insurance business shall be sub-divided into the following categories, that is –

(a)             fire insurance business;

(b)             accident insurance business;

(d)             workmen's compensation insurance business;

(e)             goods-in-transit insurance by road, water, air or rail;

(f)             marine and aviation insurance business other than that specified in paragraph (e) of this subsection;

(g)            oil and gas insurance business;

(h)            contractors "all risks" and engineering risk insurance business;

(i)             credit Insurance, bond and suretyship;

(j)             railway rolling stock insurance business; and

(k)             miscellaneous insurance business;

(4)             For the purposes of this Decree -

(a)             any part of an insurance business may be treated as belonging to a particular class of insurance business; and

(b)            reinsurance of liabilities under an insurance policy shall be treated as insurance business of the class to which such policy would have belonged if it had been issued by the reinsurer.

(5)            Subject to the provisions of this Decree, an insurer may be authorised to transact any new category of miscellaneous insurance business if he shows evidence of adequate reinsurance arrangement in respect of that category of miscellaneous insurance business, possesses, relevant expertise in that category of insurance business; and requisite capital where necessary.

(6)            If the National Insurance Commission (in this Decree referred to as "the Commission") is satisfied that an insurer -

(a)             has conducted his business in accordance with sound insurance principles; and

(b)             has complied with the provisions of this Decree,

3.-  (1)            No person shall carry any class of insurance business in Nigeria except -

(a)            a company duly incorporated as a limited liability company under or pursuant to the Companies and Allied Matters Decree 1990; or

(b)            a co-operative insurance society registered under any enactment or law relating to co-operative societies; or

(c)            a mutual insurance company; or

(d)            a body duly established by or pursuant to an enactment to transact the business of insurance or reinsurance.

(2)            For the purposes of subsection (1)(c) of this section, any seven or more persons may, subscribing their names to a Memorandum of Association and otherwise comply with the requirements of this Decree as to registration, form a mutual insurance company the aim of which shall be to use any profit derived from their operations to reduce the cost of insurance undertaken by its members.

(3)            A person who has or has acquired shares, the nominal value of which, by itself or together with the aggregate nominal owned by that person or by that person and his associates amounts to more than 25 per centum of the total nominal value of all the issued shares of the insurer concerned shall serve on the Commission notice of the holding or acquisition.

(4)            In this section, "associate" includes the person's spouse, child, parents, step child, step parent, brother, sister, uncle, aunt, niece, nephew and cousin and where applicable their spouses.

4.-  (1)             Subject to the provisions of this Decree, no insurer shall commence or carry on insurance business in Nigeria unless the insurer is registered by the Commission under or pursuant to this Decree.

(2)            The Commission -

(a)            may in granting an approval under section 3 of this Decree impose such conditions as it may deem fit; and

(b)            shall not grant approval if it is satisfied that is not in the public interest or the interests of policy holders or persons who may become policy holders, for it to be given.

(3)            Where an insurer is not satisfied with the decision of the Commission under the foregoing provisions of this section, he may appeal to the Minister within 30 days of the refusal.

5.-   (1)             An application for registration as an insurer shall be made to the Commission in the prescribed form and be accompanied by a business plan and such other documents or information as the Commission may, from time to time, direct or require.

(2)            For the purposes of this Decree, life insurance business and general insurance business shall be subject to separate application and registration.

(a)            that the class or category of insurance business shall be conducted in accordance with sound insurance principles;

(b)            that the applicant being one of the referred to in section 3(1) of this Decree is duly established under the applicable law and has a paid up share capital as specified in section 10 of this Decree for the relevant class of insurance business;

(c)            that the relevant statutory deposit specified in section 10 of this Decree has been paid to the Central Bank of Nigeria (in this Decree referred to as "the Central Bank") and the applicant has submitted a certificate from the Central Bank to that effect;

(d)           that the arrangements relating to reinsurance treaties in respect of the class or category of insurance business to be transacted are adequate and valid;

(e)            that the proposal forms, terms and conditions of policies are in order and acceptable;

(f)             that there is at least -

(i)            a competent and professionally qualified person, or

(ii)            a person who holds a recorganised degree in insurance or actuarial science with at least 5 years post qualification experience in middle management cadre of an establishment insurance company or a similar qualification with at least 10 years post-qualification experience in the middle management cadre of an insurance company, who is registered as an insurance practitioner by the Institute and has satisfied the requirements of the Institute, to head each of the departments of the insurance business dealing in oil and gas, credit insurance bonds and suretyship, contracts' all risk, engineering risk insurance, marine and aviation insurance and reinsurance;

(g)            that the applicant does not have in its employment a person disqualified from being appointed by an insurer under section 15 of this Decree;

(h)            that the directors and shareholders are persons who have not been involved in or been found guilty of fraud;

(i)             that the 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;

(j)             that the applicant has paid the fee prescribed for registration;

(k)            that it is in the interest of public policy that the applicant be registered;

(l)             that, where the class of insurance is other than life insurance business, the application is for the purposes of transacting not less than 3 classes of insurance business;

(m)           that the applicant has a satisfactory business plan and feasibility study of the insurance business to be transacted within the next succeeding 5 years from the date of the application; and

(n)            in the case of reinsurance business, that in addition to the matters referred to in this section, it has complied with section 10(1)(d) of this Decree and any other conditions which may be specified. from time to time, by the Minister.

(2)            The Commission shall, if satisfied as the matters referred to in subsection (1) of this section, register the applicant provisionally as an insurer and issue to the applicant a provisional certificate of registration which shall be valued for a period of 3 years.

(3)             Notice of the registration of an applicant as an insurer (including registration pursuant to subsection (4) of this section and subsection (6) of section 7 of this Decree, shall be published in the Gazette.

(4)             An insurer registered provisionally under subsection (2) of this section shall -

(a)            have its registration cancelled if it does not commence business within 3 months of registration;

(b)            before the expiry date of the provisional registration, if it desires to continue in business, apply to the Commission for full registration.

(5)            The Commission shall, if satisfied that -

(a)             the operation of the business plan submitted by the insurer under subsection (1) of this section has produced the desired result; and

(b)            the insurer has conducted its business in accordance with -

(i)             sound insurance principles, and

(ii)            the provisions of this Decree and any other enactment,

7.-   (1) If the Commission is not satisfied as the matters referred to in subsection (1) or (5) of section 6 of this Decree, it shall give notice in writing to the applicant within 90 days of the submission of the application of the Commission's intention to reject the application.

(2)            An applicant aggrieved by the intention of the Commission to reject an application for registration as an insurer may, within 30 days after the date of the notice of the Commission's intention to reject the application, lodge with the Director-General of the Ministry a notice of appeal to the Minister.

(3)            The notice of appeal under subsection (2) of this section shall be in writing setting out the grounds on which it is made, and the Director-General shall transmit the notice with any other relevant documents to the Minister within 14 days after the date of its receipt by the Director-General.

(5)            The Director-General shall, unless the appeal is withdrawn, give notice in writing to the applicant of the decision of the Minister (which shall not be subject to appeal) if the appeal is allowed, the Director-General shall cause the Commission to register the person as an insurer and notify him in writing accordingly.

(6)             If an appeal is disallowed, the Director-General shall cause a notice thereof to be published in the Gazette and in such other manner to ensure wide publicity therefore as he may determine.

8.-   (1)             If, in the case of a registered insurer, the Commission is satisfied that -

(a)            the class of insurance business of the insurer is not being conducted in accordance with sound insurance principles; or

(b)            the insurer has failed to satisfy the margin of solvency as contained in section 25 of this Decree; or

(c)            the insurer has ceased to carry on insurance business of the class or category assigned to it for at least one year in Nigeria; or

(d)            the insurer has applied in writing for the cancellation if its registration as an insurer; or

(e)            a judgement obtained from a court of competent jurisdiction in Nigeria against the insurer remains unsatisfied for 30 days and there is no appeal pending against the judgement; or

(f)             the insurer is carrying on simultaneously with the insurance business any other business which is detrimental to the insurance business of the insurer; or

(h)            that the insurer has refused to submit to an examination of its books as provided for in this Decree; or

(i)             that the insurer has failed to comply with the provisions of subsection (5) of section 27 of this Decree; or

(j)             that the insurer has failed to maintain adequate reinsurance arrangements and treaties in respect of the classes or category of insurance business the insurer is authorised to transacted; or

(k)            subject to subsection (3) of this section, the insurer lacks the necessary expertise by virtue of a substantial reduction in the number of its qualified employees; or

(l)             that the insurer has contravened the provisions of section 7 of the Nigeria Reinsurance Corporation Act or any other law relating to compulsory reinsurance; or

(m)           that the net assets of the insurer are below the minimum paid-up capital and the capital has not been made within the time stipulated by the Commission; or

(n)            that the insurer persistently fails to pay claims promptly; or

(o)            that the insurer has failed to set up the special reserves as prescribed under subsection (1) of section 25 of this Decree; or

(p)            that the insurer has established a branch office without the approval of the Commission; or

(q)            that the insurer acts in any manner without the approval of the Commission in cases where this Decree requires such approval; or

(r)             that the insurer has been wound-up or otherwise dissolved or has gone into liquidation; or

(s)            that the insurer, in the case of a reinsurance company, has failed to satisfy the provisions of section 25 of this Decree,

(2)            Where no appeal is lodged as provided for under section 7 of this Decree, the Commission shall, with the approval of the Minister, cancel the registration of the insurer and notice of such cancellation shall be published in the Gazette.

(3)            Where the lack of necessary expertise specified in subsection (1) (k) of this section relates to a particular class of insurance business, the Commission may -

(a)            suspend the insurer from carrying on the class of insurance business until the deficiency is corrected; or

(b)            cancel that class of insurance business from the number of insurance business the insurer is authorised to transact.

(4)           Where a certificate of registration of an insurer is cancelled, the insurer shall forthwith discontinue acceptance of any new business -

(a)            within 2 years from the date of the cancellation, in the case of the reinsurance business to which the provisions of section 8 of this Decree shall also apply; or

(b)            within 12 months from the date of cancellation, in any other case, and all cases, a receiver may be appointed from the date of cancellation in accordance with the provisions of section 55 of this Decree; and shall wind-up the insurance business in accordance with the provisions of section 56 of this Decree.

10.-  (1)           No insurer shall carry on insurance business in Nigeria unless the insurer has and maintains, while carrying on that business, a paid-up share capital of the following amounts as the case may require, that is -

(a)            in the case of life insurance business, not less than 20,000,000;

(b)            in the case of general insurance business, not less than 20,000,000;

(c)            where the general insurance business includes any of the following, that is -

(i)            oil and gas insurance business,

(ii)           credit insurance business, bonds and suretyship,

(iii)          contractors' all risk and engineering risk insurance business,

(iv)           marine and aviation insurance business, other than goods-in-transit insurance business by road, water, air and rail,

(d)            in the case of reinsurance business, not less than 150,000,000;

(2)            The paid-up share capital stipulated in subsection (1) of this section -

(a)             in the case of existing insurers, shall come into force on the expiration of the period of 1 year from the date of the commencement of this Decree;

(b)            shall be subscribed to by shareholders without recourse to the insurance funds and the statutory reserves of the body corporate;

(c)            may be subscribed to by the capitalization of part of undistributed profits.

(3)             Failure to satisfy the paid-up share capital as stipulated in subsection (1) of this section shall constitute a ground for the cancellation of the certificate of registration of an insurer under section 8 of this Decree.

(4)            The Minister may, from time to time, on the recommendation of the Commission with the approval of the Head of State, Commander-in-Chief of the Armed Forces by an order published in the Gazette, vary the amount of minimum paid-up share capital.

11.-  (1)           An insurer intending to commence or continue to carry on insurance business in Nigeria after the commencement of this Decree shall -

(a)            deposit the share capital referred to in section 10 of this Decree (in this Decree referred to as "the statutory deposit") with the Central Bank;

(b)            keep deposited with the Central Bank, the statutory deposit at all times during which the insurer is lawfully carrying on insurance business in Nigeria under or pursuant to the provisions of this Decree.

(2)            Any statutory deposit made under subsection (1) of this section shall attract interest at the minimum lending rate by the Central Bank on every 1st January of each year.

(a)            after the registration of an insurer pursuant to section 6 of this Decree, cause to be released to the insurer a sum not exceeding 50 per centum of the statutory deposit paid by the insurer in respect of each class or category of insurance business but where registration is refused or is subsequently cancelled the whole of the statutory deposit shall, subject to the other provisions of this Decree, be released to the insurer concerned;

(b)            in the case of an insurer who has been in business for a period of not less than five years and has continuously conformed with the solvency requirement for each year of business, in accordance with subsection (2) of section 25 of this Decree, cause to be released a further 35 per centum of the statutory deposit.

13.-  (1)           Where an insurer suffers a substantial loss, that is, such loss as it cannot reasonably meet from its own resources, the Commission may, upon application therefore by the insurer, approve the withdrawal from the statutory deposit of an amount of not more than 25 per centum of the deposit and any amount so withdrawn shall be replaced by the insurer not later than 30 days after the date of such withdrawal.

(2)            The statutory deposit shall be regarded as assets of the insurer and shall be available, if a certificate of insurance is cancelled, for the discharge of the liabilities arising out of policies of the insurance business transacted by the insurer and remaining undischarged at the time of the cancellation of the certificate or winding-up.

14.-  (1)    &