The National Insurance Company (NAICOM) has introduced a series of new regulatory requirements for life insurance companies offering annuity products in Nigeria.
An annuity is a financial product offered by insurance companies that’s designed to provide a guaranteed income stream, usually during retirement.
These regulations aim to strengthen the framework governing annuity business and protect the interests of retirees.
NAICOM, in a circular issued on Friday in Abuja, announced that insurance companies must employ at least one qualified actuary responsible for asset-liability management (ALM) analysis and implementation.
NAICOM also announced that insurance companies must submit quarterly ALM reports, adhering to the guidelines outlined in the circular.
These guidelines detail required actions based on the analysis results, in accordance with the Standards of Actuarial Practice (NSAP).
The commission maintained that Insurance companies unable to meet the additional expenses mandated by the circular will have 180 days to transfer their annuity portfolio to another qualified insurer.
It further stated that the NAICOM’s circular takes effect February 1st.
The commission also expressed its expectation of full compliance to ensure a stable and secure annuity market in Nigeria.
”Insurance companies are required to comply with the new requirements, with the board of directors responsible for ensuring strict compliance.
”The circular aims to enshrine best practices in the management of annuity portfolios by insurance institutions in furtherance to ensuring a safe, sound, and stable insurance sector,” it read.
NAICOM’s enhanced regulatory framework for annuity providers, focusing on actuarial expertise, rigorous reporting, and financial soundness, seems a positive step towards bolstering market stability and protecting annuitants’ interests and requesting service competency.
