By Bisi Bamishe
National Insurance Commission (NAICOM) has released a circular outling additional regulatory requirements for life insurance companies carrying on annuity business in Nigeria.
The circular dated January 24, 2025, aims to enshrine best practice in the management of annuity by insurance institutions in furtherance to ensuring a safe, sound and stable insurance sector.
Some key requirements of the circular include:
(a) Qualified Actuary: Insurance companies are required to have at least one aqualified Actuary responsible for Assets-Liability Matching (ALM) analysis and implementation.
(b) ALM Reports: Companies are required to submit ALM reports to the Commission quarterly with requirements outlined in the circular such as required action by insurers depending on the results from specific analysis applying guidance provided in the NAS Standard of Actuarial Practice (NSAP).
(c) Regulatory Compliance: Insurance companies are required to comply with the new requirements, with the Board of Directors responsible for ensuring strict compliance
(d) 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.
(e) Effective Date: The circular takes effect on February 1, 2025 expected to comply with the new requirements to ensure a stable and secure annuity business in Nigeria.
