Pension industry takes over annuity business

By Abdul Olalekan

There are strong indications that the pension industry may have succeeded in snatching away annuity business from insurance industry, as some life insurance firms in the country have remitted their annuity fund to Pension Fund Custodians (PFCs) as earlier directed by the National Pension Commission (PenCom), Business 247 News Online investigation reveals.

The commission had earlier directed the life insurers to remit annuity fund with them to PFCs, a development insurance industry vehemently opposd.

This led to series of meetings between PenCom and the National Insurance Commission (NAICOM), which is acting on behalf of insurance industry, but all the meetings ended in a  deadlock. To this end, there was a stay of execution on the earlier circular from PenCom, until the both pension and insurance operators agree on what is best for the two sectors.

However, Business 247 News Online gathered on Wednesday that some insurance companies have gone ahead to submit their annuity fund to PFCs in a bid to take new annuity business, as they believe it is taking too long before the two industries agree.

With this development, the investment of annuity fund  will now be subjected to investment guidelines of the  Pension Acts as insurers will not be allowed to invest their annuity fund in businesses not spelt out in the investment guidelines, unlike what it was in the past whereby insurers can invest in whatever they choose to.

The total annuity fund of insurance industry is N145  billion.