NAICOM Orders Insurers to File Protection Fund Returns by May 31

Ebere Nwoji

In a fresh move to protect policyholders against distress and insolvency of insurance firms, the National Insurance Commission (NAICOM) has issued a directive to insurance institutions for the collection, management, and administration of the Insurance Policyholders’ Protection Fund (IPPF).

The commission has also set May 31, 2026, as the deadline for the submission of 2025 assessment returns on the protective fund.

The directive was contained in a circular with reference number Ref: NAICOM/DIR/CIR/79/2026) dated April 7, 2026, that was signed by the Deputy Director, Special Risk & Security Analysis, John Falade, on behalf of the Commissioner for Insurance, Olusegun Ayo Omosehin.

According to the Commission, the new guidelines for the collection, management, and administration of the Fund were established in line with the powers conferred by the Nigerian Insurance Industry Reform Act 2025 and other extant laws.

The NAICOM’s  Insurance Policyholders Protection Fund (IPPF) is a statutory safety net established by the Nigerian Insurance Industry Reform Act (NIIRA) 2025. It is designed to ensure policyholders are compensated if their insurance or reinsurance company fails.

The fund guarantees that policyholders are not left stranded if an insurance company becomes distressed, has its license revoked, or goes into liquidation. It provides a financial safety net to pay outstanding claims and can help maintain coverage continuity during an insurer’s failure.

The fund is financed through a 0.25 percent contribution on the gross premium income of all insurers and reinsurers. NAICOM therefore issued a comprehensive guideline that established a clear framework for collecting, managing, and administering the fund to ensure transparency and regulatory compliance.

The guidelines were designed to, among other things, provide clarity and guidance for operators, facilitate seamless regulatory compliance, and strengthen the industry’s safety net for consumers.

The Protection fund serves as a critical statutory cushion intended to protect policyholders in the event of distress or insolvency of licensed insurers or reinsurers. It also includes specific provisions for the reimbursement of loans by these entities.

The circular mandates that all relevant institutions submit their IPPF Assessment Returns for the 2025 financial year no later than May 31, 2026.

“Please be informed that the IPPF Assessment Returns in respect of the year 2025 shall be submitted to the Commission not later than 31st May 2026, while subsequent submission shall be in line with Section 4.3 of the Guideline on Insurance Policyholders Protection Fund,” the circular stated,” the commission stated.

The commission further warned that strict compliance was expected from all insurers and reinsurers, insisting that it was committed to maintaining a stable and protected insurance environment for the insured public.