NAICOM Unveils Revised Annuity Laws for Insurance coverage Operators
In a transfer to strengthen the annuity market and guarantee larger transparency, the Nationwide Insurance coverage Fee (NAICOM) has launched new laws governing annuity enterprise, efficient February 1, 2025.
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 cost or a sequence of instalments.
In an announcement on Friday, NAICOM launched a round outlining extra regulatory necessities for all times insurance coverage firms 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 firms, goals to enshrine greatest practices within the administration of annuity portfolios by insurance coverage establishments.
The brand new guidelines mandate that insurance coverage firms are required to have a minimum of one certified actuary chargeable for assets-liability matching evaluation and implementation of its adoption by the funding group of the corporate.
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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 reviews 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 Studies: Firms are required to submit ALM reviews to the fee quarterly, with necessities outlined within the round similar to required actions by insurers relying on the outcomes from particular evaluation making use of steering supplied within the NAS Requirements of Actuarial Apply.”
NAICOM stated that insurance coverage firms are required to adjust to the brand new necessities, with the board of administrators chargeable for guaranteeing strict compliance.
Additionally, the regulator stated that firms 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 reviews, the brand new pointers learn, “The ALM report shall be submitted to the Fee not later than 15 days after the top of each quarter in keeping with the reporting requirement stipulated in paragraph 3.4.3 of the Prudential Tips.
“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.”
