Reps Probe 25 Insurance Firms over Revenue Leakages, Fuel Sector Reform Risks Backdrop

The House of Representatives has launched an unprecedented investigation into 25 insurance companies operating in Nigeria, amid allegations that they have collectively failed to remit billions of naira in statutory revenue due to the federal government. The probe, conducted by the House’s Sub‑Committee on Capital Markets and Other Institutions, has sent shockwaves through the insurance sector and raised pressing governance issues.

According to the committee chairman, Hon. Kwamoti Laori, the investigation stems from petitions and preliminary findings revealing serious infractions, including under‑remittance of compulsory insurance contributions and premium levies. Allegedly, several firms failed to forward proceeds from mandatory insurance schemes—such as group life cover for federal workers—depriving government coffers of funds earmarked for statutory purposes.

The firms under scrutiny include major insurers and market players such as International Energy Insurance, LASACO Assurance, Consolidated Hallmark, Guinea Insurance, AIICO, Axa Mansard, Mutual Benefit, Linkage Assurance, Prestige, NEM, Sunu, Regency, Universal Insurance, and others. The sub‑committee has provided each firm with detailed summaries of liabilities and has requested that they confirm or contest the figures with supporting documentation.

However, the probe has encountered resistance. Seventeen of the named companies have filed court applications seeking to annul the committee’s summons. Laori characterised this as an attempt to frustrate oversight, arguing that some restraining orders are merely delaying tactics to evade accountability. Nonetheless, he conceded that the House will examine the legal filings and proceed if they do not impair its constitutional mandate.

Adding to tensions, several firms sent low-level representatives instead of Chief Executive Officers or Chief Operating Officers, contrary to the committee’s directive. Laori condemned this practice, stating only COOs or equivalent executives would be permitted to testify, ensuring those who can speak credibly to internal controls and corporate decisions are held to account.

While the committee asserts its oversight duty to safeguard public revenue, the Nigerian Insurers Association (NIA) has responded with caution. The association’s director-general emphasised that its members’ legal responses, including court actions, were taken to protect institutional integrity and uphold the autonomy of statutory regulators like NAICOM. NIA argued that the legislative exercise could overstep into regulatory territory reserved by law for the National Insurance Commission.

Observers warn that the public nature of the affair may undermine confidence in a sector already grappling with very low insurance penetration—below 1% of GDP—and widespread mistrust among potential policyholders. The optics of a public confrontation with insurers by parliament risk deterring new customers and investors at a time when the industry is trying to reposition itself through reforms, digitalisation, and public education.

Compounding the challenges, critics argue that the probe highlights regulatory lapses at NAICOM, which as the industry’s statutory supervisor, is expected to detect and deter such noncompliance. Lawmakers assert that stronger enforcement by the regulator might have prevented the current situation, further igniting debate about accountability in the sector.

The investigation occurs against the backdrop of sweeping legislative changes. The Insurance Industry Reform Act 2024 has introduced higher minimum capital requirements, updated governance standards, and a new twin-classification of life and non-life insurance businesses. But the probe underlines the fragile balance between regulation, revenue enforcement, and preserving market confidence during the implementation phase of reform.

In addition to revenue remittance, the committee is also reviewing issues related to policy issuance, claims settlement, financial reporting, and premium collection practices across the implicated firms. Transparency in these critical operations is under scrutiny, with a view to determine whether systemic breaches have occurred or if discrepancies reflect misaligned accounting practices.

Throughout the hearings, Laori reiterated the House’s constitutional authority to ensure federal revenue is protected and mismanaged funds are recovered. Despite legal pushback, he affirmed the committee will press ahead, unless court rulings explicitly block the probe’s underlying mandate.

As the drama unfolds, policymakers and industry players warn that the resolution of these allegations will determine not only the fate of the involved firms but also broader public trust in insurance as a viable risk-sharing mechanism. With reforms underway, the industry now faces a critical test: whether it can emerge stronger, more compliant, and more credible in protecting policyholders and government interest alike.

The next phase will involve public testimony by CEOs or COOs of each firm and review of corporate records. Sanctions or legislative recommendations may follow if infractions are validated. Meanwhile, the industry and its regulators will need to navigate transparency, legal boundaries, and market sentiment carefully to restore confidence and support long-term growth.