The Federal Government of Nigeria has enacted the Nigerian Insurance Industry Reform Act (NIIRA) 2025, signed into law by President Bola Ahmed Tinubu on August 5, 2025. This landmark legislation mandates compulsory insurance for public buildings and those under construction, aiming to enhance safety, risk management, and regulatory compliance in the real estate sector. However, the policy has sparked widespread concern among Nigerians, who fear it will significantly increase rental costs, further straining the already fragile housing market.
The NIIRA 2025 requires owners and occupiers of public buildings—such as tenements, hostels, offices, malls, and any structure accessible for educational, medical, recreational, or commercial purposes—to insure their properties against hazards like fire, collapse, floods, earthquakes, and storms. Buildings under construction with more than one floor also fall under this mandate, with builders’ liability insurance required to cover third-party damages, including death or injury. Non-compliance carries severe penalties: landlords and occupiers face fines of at least ₦1 million, up to 12 months imprisonment, or both, while developers risk ₦5 million fines or three years in jail.
The National Insurance Commission (NAICOM) is tasked with enforcing these provisions, collaborating with stakeholders like the Federal Fire Service and Development Control to ensure compliance. NAICOM’s Deputy Commissioner, Ekerete Gam-Ikon, emphasized the need for proper risk assessments and documentation before insurance approval, aiming to prevent uninsured tragedies and improve safety standards. The Act also mandates that insurance payouts for fire-damaged buildings be used for rebuilding, ensuring asset protection and business continuity.
Critics, however, argue that the policy adds to Nigeria’s growing financial burdens, with many citizens already grappling with economic challenges. Social media posts on X reflect public sentiment, with users like @chude__ and @LisaNwabia warning that landlords will likely pass the additional insurance costs—estimated at up to 6% of construction and maintenance expenses—onto tenants, driving up rents. This could exacerbate housing affordability issues, particularly for low-income households. Some fear developers may opt out of projects due to the financial and legal risks of non-compliance.
While the government views the Act as a step toward financial inclusion and a $1 trillion economy, Nigerians remain skeptical, questioning the capacity of insurance companies to deliver and the policy’s impact on the poor.
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