The National Insurance Commission NAICOM has issued a circular outlining additional regulatory requirements for life insurance companies carrying on annuity business in Nigeria.
The circular, dated January 24, 2025, seeks to enshrine best practice in the management of annuity portfolios by insurance institutions in furtherance to ensuring a safe, sound, and stable insurance sector.
NAICOM listed a number of requirements in the circular to be met by annuity businesses in the country to include Qualified Actuary: Insurance companies are required to have at least one qualified actuary responsible for Assets-Liability Matching (ALM) analysis and implementation. Companies are required to submit ALM reports to the Commission quarterly, with requirements outlined in the circular such as required actions by insurers depending on the results from specific analysis applying guidance provided in the NAS Standards of Actuarial Practice (NSAP).
NAICOM also requires Regulatory Compliance where Insurance companies are required to comply with the new requirements, with the Board of Directors responsible for ensuring strict compliance. On 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.
The circular takes effect on February 1, 2025, and the regulator said it expects Insurance companies to comply with the new requirements to ensure a stable and secure annuity business in Nigeria.
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