Insurance Proposal Form (Nigeria)

An Insurance Proposal Form in Nigeria records the particulars required for the matter it documents.

Insurance regulation in Nigeria is the exclusive preserve of the National Insurance Commission (NAICOM), established under the National Insurance Commission Act (Cap N53, LFN 2004). NAICOM licenses all insurance companies, reinsurance companies, insurance brokers, and loss adjusters operating in Nigeria. The Insurance Act 2003 is the primary statute governing all classes of insurance in Nigeria, supplemented by NAICOM's Market Development and Restructuring Initiative (MDRI) guidelines, which mandate the compulsory purchase of insurance in prescribed categories. The Nigerian Insurers Association (NIA) and the Nigerian Council of Registered Insurance Brokers (NCRIB) are the principal industry self-regulatory bodies.

The major classes of insurance for which proposal forms are submitted include: motor vehicle insurance (compulsory third-party insurance under the Motor Vehicles (Third Party Insurance) Act, Cap M22, LFN 2004); property and fire insurance; marine and cargo insurance; life and health insurance; employers' liability and workmen's compensation insurance; and oil and gas insurance. The proposal form, once accepted and a premium paid, gives rise to a binding insurance contract evidenced by the insurance policy document and, for motor insurance, the insurance certificate that must be carried in the vehicle at all times.

A completed proposal form, together with the payment of the first premium, constitutes the policyholder's offer to insure, which the insurer accepts by issuing a cover note (providing temporary cover for up to 30 days) and subsequently a formal insurance policy. The Insurance Act 2003 prohibits insurers from charging premiums below the NAICOM minimum premium rates to prevent predatory pricing and confirm industry solvency. Non-disclosure of a material fact — whether fraudulent or innocent — entitles the insurer to avoid the policy ab initio under Nigerian insurance law.

The legal framework governing the Insurance Proposal Form in Nigeria draws on several key statutes. Section 50 of the Insurance Act 2003 (No. 1 of 2003) governs the cover note issued on acceptance of the proposal and requires the insurer to retain the proposal form as the basis of the contract. Section 40 of the Insurance Act 2003 prohibits placement with an insurer not licensed by the National Insurance Commission (NAICOM) under the National Insurance Commission Act (Cap N53, LFN 2004). Section 64(1)(a) of the Insurance Act 2003 mandates builders' liability insurance for all buildings under construction in public places. Section 9(3) of the Pension Reform Act 2014 requires employers with five or more employees to provide group life assurance cover of at least three times annual emoluments. The Motor Vehicles (Third Party Insurance) Act (Cap M22, LFN 2004) makes third-party motor insurance compulsory for all vehicles on public roads — enforced by the Federal Road Safety Corps (FRSC) and the Nigeria Police Force (NPF) using the Nigerian Insurance Industry Database (NIID) maintained by NAICOM. The Companies and Allied Matters Act 2020 (CAMA) regulates corporate proposers through the Corporate Affairs Commission (CAC). The Nigeria Data Protection Regulation (NDPR) 2019 administered by the Nigeria Data Protection Commission (NDPC) governs personal data collected on proposal forms. Parties executing an Insurance Proposal Form should confirm current NAICOM minimum premium rates and MDRI requirements.

An Insurance Proposal Form in Nigeria is required whenever a person or company wishes to obtain insurance cover from a NAICOM-licensed insurer.

An Insurance Proposal Form is needed when a vehicle owner in Nigeria applies for motor vehicle insurance — whether compulsory third-party insurance under the Motor Vehicles (Third Party Insurance) Act (Cap M22, LFN 2004) or voluntary thorough motor insurance. The Federal Road Safety Corps (FRSC) and the Nigeria Police Force (NPF) verify insurance status using the Nigerian Insurance Industry Database (NIID) maintained by NAICOM.

An Insurance Proposal Form is required when a property owner — whether an individual homeowner or a commercial property owner — applies to a NAICOM-licensed insurer for fire and special perils insurance, burglary insurance, or all-risks property insurance. Under the Insurance Act 2003, buildings under construction financed by a bank regulated by the Central Bank of Nigeria (CBN) must carry insurance.

An Insurance Proposal Form is needed when an individual or corporate employer applies for life assurance cover from a NAICOM-licensed life assurance company — such as Leadway Assurance, AXA Mansard, AIICO Insurance, or FBN Insurance — and must disclose medical history, lifestyle, and financial information material to the insurer's underwriting decision.

An Insurance Proposal Form is required when a Nigerian importer or exporter applies for marine cargo insurance to cover goods in transit under a bill of lading issued by a shipping company, coordinating with the Nigeria Customs Service (NCS) on import/export documentation.

An Insurance Proposal Form is needed when a Nigerian employer applies for employers' liability or workmen's compensation insurance under the Employee Compensation Act 2010 administered by the Nigeria Social Insurance Trust Fund (NSITF), to cover workplace injury liabilities.

Proposers in Nigeria should complete an Insurance Proposal Form accurately and submit it to a NAICOM-licensed insurer before risk commences. Section 64(1)(b) of the Insurance Act 2003 mandates occupier's liability insurance for all public buildings. The Employee Compensation Act 2010 administered by the Nigeria Social Insurance Trust Fund (NSITF) governs workplace injury compensation, and employers are required to carry employers' liability insurance. The Nigerian Insurers Association (NIA) and the Nigerian Council of Registered Insurance Brokers (NCRIB) regulate industry standards. The Federal Inland Revenue Service (FIRS) collects insurance premium levies under the Finance Act amendments. The National Insurance Commission (NAICOM), established under the National Insurance Commission Act (Cap N53, LFN 2004), has supervisory authority over all NAICOM-licensed insurers and brokers. The State High Courts and Federal High Court adjudicate insurance contract disputes. The Driver and Vehicle Licensing Authority (DVLA) issues roadworthiness certificates required with motor insurance proposals. Where compulsory insurance under Section 64 of the Insurance Act 2003 has not been obtained, regulatory penalties and civil liability may arise.

A valid Insurance Proposal Form in Nigeria must contain the following essential elements to satisfy the insurer's underwriting requirements and the duty of utmost good faith under the Insurance Act 2003 (No. 1 of 2003).

Proposer's Personal Details: Full legal name, address, date of birth, occupation, and contact details. For corporate proposers, the CAC registration number (RC Number) under CAMA 2020 and FIRS Tax Identification Number (TIN) are required. Compliance with the Nigeria Data Protection Regulation (NDPR) 2019 administered by the Nigeria Data Protection Commission (NDPC) requires the insurer to obtain consent for processing personal data collected on the form.

Class of Insurance Sought: Specify the class — motor (comprehensive or third-party under the Motor Vehicles (Third Party Insurance) Act, Cap M22, LFN 2004), property (fire, burglary, all-risks), life (term, whole life, endowment), marine, employers' liability, or other NAICOM-licensed class — and the sum insured in Nigerian Naira (NGN).

Description of the Insured Risk: For motor insurance — vehicle registration number, make, model, year of manufacture, engine and chassis numbers, cubic capacity, and current market value as required by the NAICOM Market Development and Restructuring Initiative (MDRI) guidelines. For property insurance — property address, construction type (brick, wood, corrugated iron), age, use (residential or commercial), and any existing mortgage with a CBN-licensed bank under the Banks and Other Financial Institutions Act 2020 (BOFIA). For life insurance — date of birth, medical history, smoking status, hazardous occupation, and beneficiary details with FIRS TIN.

Previous Insurance History: Details of previous insurance policies with any NAICOM-licensed insurer registered under the National Insurance Commission Act (Cap N53, LFN 2004), any claims made in the past five years, any previous policy cancellation, refusal, or special conditions imposed — all of which are material to the underwriting decision under Section 50 of the Insurance Act 2003.

Material Disclosure: A thorough declaration of all material facts known to the proposer — required by the uberrimae fidei doctrine, which is fundamental to the legal validity of the proposal form. Failure to disclose any material fact entitles the insurer to avoid the policy ab initio, as confirmed by Nigerian courts. NAICOM-licensed insurers rely on the Insurance Act 2003 and Nigerian Insurers Association (NIA) underwriting guidelines when assessing materiality.

Premium Payment Method: The proposed premium payment schedule — annual, half-yearly, or monthly — and the payment method (direct debit, NIBSS Instant Payments electronic funds transfer, or cash). The Insurance Act 2003 prohibits insurers from charging premiums below NAICOM minimum premium rates under the MDRI framework.

Declaration: A declaration by the proposer that all answers are true and complete, that no material information has been withheld, and that the proposer understands the proposal form forms the basis of the insurance contract under Section 50 of the Insurance Act 2003. The declaration must be signed personally by the proposer or their authorised Nigerian Council of Registered Insurance Brokers (NCRIB)-registered broker.

Signature and Date: Signed by the proposer (or their NCRIB-licensed broker) with the date. The Federal High Court and state High Courts have jurisdiction over insurance disputes under Nigerian law. The Insurance Act 2003 mandates retention of the proposal form by the insurer throughout the policy period as primary evidence of the basis-of-contract terms.

Forms-legal.com provides this Insurance Proposal Form as a starting point for NAICOM-compliant insurance applications in Nigeria. Proposers should verify current NAICOM minimum premium rates and confirm their broker's NCRIB registration before submission.