NAICOM points recent annuity guidelines to insurance coverage corporations

The Nationwide Insurance coverage Fee has issued recent laws on annuity enterprise with impact from February 1, 2025, in a bid to sanitise that section of the market.

An annuity is a contract between you and an insurance coverage firm that requires the insurer to make funds to you, both instantly or sooner or later. You get a hard and fast amount of cash for the remainder of your life in return for a lump sum fee or a sequence of instalments.

In a press release on Friday, NAICOM launched a round outlining further 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 finest practices within the administration of annuity portfolios by insurance coverage establishments.

The brand new guidelines mandate that insurance coverage corporations are required to have not less than one certified actuary chargeable for assets-liability matching evaluation and implementation of its adoption by the funding group of the corporate.

Part of the rules learn, “An insurer that doesn’t have an in-house certified actuary shall make preparations for a professional one from an exterior actuarial agency to tackle the ALM duty on its behalf for an interim interval of not more than two 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 stories as required by the provisions of paragraphs 3.4.3, 7.3.1, and eight.1.5(m) of the Prudential Pointers, shall be topic to the prior approval of the fee.

ALM Reviews: Corporations are required to submit ALM stories to the fee quarterly, with necessities outlined within the round resembling required actions by insurers relying on the outcomes from particular evaluation making use of steering offered within the NAS Requirements of Actuarial Apply.”

NAICOM mentioned that insurance coverage corporations are required to adjust to the brand new necessities, with the board of administrators chargeable 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 stories, the brand new tips learn, “The ALM report shall be submitted to the Fee not later than 15 days after the tip of each quarter in keeping with the reporting requirement stipulated in paragraph 3.4.3 of the Prudential Pointers.

“With out prejudice to paragraph seven 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 corporate shall undergo the fee the prescribed ALM report month-to-month, not later than the fifteenth of the succeeding month.”