THE National Insurance Commission (NAICOM) has directed life insurance companies that are unable to cover the additional expenses imposed by its recent circular to transfer their annuity portfolio to another suitable insurance company within 180 days.
The effective date for the commencement of implementation of the circular on ‘Additional Regulatory Requirements for Annuity Business in Nigeria’ is February 1, 2025.
This is contained in a circular released recently by NAICOM outlining additional regulatory requirements for life insurance companies carrying on annuity business in Nigeria.
The circular, dated January 24, 2025, aimed to enshrine best practice in the management of annuity portfolios by insurance institutions in furtherance to ensuring a safe, sound, and stable insurance sector.
The Commission stated: “Transfer of Annuity Portfolio: Companies that are unable to cover the additional expenses imposed by the circular are required to transfer their annuity portfolio to another suitable insurance company within 180 days”.
Some other key requirements of the circular include,
“Qualified Actuary: Insurance companies are required to have at least one qualified actuary responsible for Assets-Liability Matching (ALM) analysis and implementation.
“ALM Reports: Companies are required to submit ALM reports to the Commission quarterly, with requirements outlined in the circular such as required actions by insurers depending on the results from specific analysis applying guidance provided in the NAS Standards of Actuarial Practice (NSAP).
“Regulatory Compliance: Insurance companies are required to comply with the new requirements, with the Board of Directors responsible for ensuring strict compliance”.
According to the NAICOM, insurance companies are expected to comply with the new requirements to ensure a stable and secure annuity business in Nigeria.
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