NAICOM points recent annuity guidelines, mandates actuarial oversight

The Nationwide Insurance coverage Fee has issued recent rules on annuity companies, efficient February 1, in a bid to sanitise that section of the market.

In keeping with a press release on Friday, NAICOM mentioned it launched a round outlining extra regulatory necessities for all times insurance coverage corporations carrying on annuity enterprise in Nigeria.

The round, dated January 29 2025, signed by Director (Innovation & Regulation), A.I Adamu, issued to Managing Administrators/CEOs of all Life Insurance coverage corporations, goals to enshrine greatest practices within the administration of annuity portfolios by insurance coverage establishments.

The brand new guidelines mandate that insurance coverage corporations are required to have a minimum of one certified actuary accountable for asset-liability matching evaluation and implementation of its adoption by the funding group of the corporate.

“An insurer that doesn’t have an in-house certified actuary, shall make preparations for a Certified Actuary from an exterior actuarial agency to tackle the ALM duty on its behalf for an interim interval of not more than 2 years, topic to the Fee’s approval for an extension for 2 or extra years, thereafter.

“The appointment of an in-house or exterior Certified Actuary, who shall log out all ALM experiences as required by the provisions of paragraphs 3.4.3, 7.3.1 and eight.1.5(m) of the Prudential Tips, shall be topic to the prior approval of the Fee. ALM Reviews: Corporations are required to submit ALM experiences to the Fee quarterly, with necessities outlined within the round reminiscent of required actions by insurers relying on the outcomes from particular evaluation making use of steerage supplied within the NAS Requirements of Actuarial Follow,” a part of the rules learn.

NAICOM mentioned that insurance coverage corporations are required to adjust to the brand new necessities, with the Board of Administrators accountable for guaranteeing strict compliance.

Additionally, the regulator mentioned that corporations which are unable to cowl the extra bills imposed by the round are required to switch their annuity portfolio to a different appropriate
insurance coverage firm inside 180 days.

On the mandated ALM experiences, the brand new tips mentioned, “The ALM report shall be submitted to the Fee not later than 15 days after the top of each quarter in step with the reporting requirement stipulated in paragraph 3.4.3 of the Prudential Tips.

“With out prejudice to paragraph 7 of this round, the place the annuity portfolio of an insurance coverage firm has greater than 1,000 (one thousand) annuitants or the portfolio is valued at N5bn or extra, the Firm shall undergo the Fee the prescribed ALM report month-to-month, not later than fifteenth of the succeeding month.”