NAICOM gives life insurers 6-month deadline to comply with annuity guidelines or transfer portfolio

The National Insurance Commission (NAICOM) has given life insurers companies in Nigeria a six-month deadline to comply with a new annuity guideline.
According to the Commission, any of the companies that will not be able to meet the new requirement within a period of 180 days, equal to six months should transfer their annuity portfolios to stronger companies.
NAICOM gave the directive Thursday in a circular titled ‘Additional Regulatory Requirements for Annuity Business in Nigeria’.
Dated January 24, 2025, the directive aims to enshrine best practice in the management of annuity portfolios by insurance institutions in furtherance to ensuring a safe, sound, and stable insurance sector.
On the transfer of annuity, NAICOM said, “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 from February 1, 2025.
The circular reads, the National Insurance Commission (the Commission) has released circular outlining additional regulatory requirements for life insurance companies carrying on annuity business in Nigeria. The circular, dated January 24, 2025, aims to enshrine best practices in the business.
Some key requirements of the circular include:
a. Qualified Actuary: Insurance companies are required to have at least one qualified 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 actions by insurers depending on the results from specific analysis applying guidance provided in the NAS Standards 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. Insurance companies are expected to comply with the new requirements to ensure a stable and secure annuity business in Nigeria.