NAICOM gives life insurers 6-months to meet 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.

The Commission said, 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, he 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

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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.

Modestus Anaesoronye

Modestus Anaesoronye is a leading Nigerian financial journalist with over two decades of experience reporting on the insurance and pension sectors across Nigeria and West Africa. He has held key editorial positions at major national media outlets, including The Comet, The Nation, and Financial Standard, and currently serves as a Senior Financial Analyst at BusinessDay Media Ltd. A widely travelled reporter, he has covered industry developments in more than 14 countries across Africa and Asia. Anaesoronye is a multiple award-winning journalist, honoured several times as Insurance Journalist of the Year and Pension Journalist of the Year by recognised industry bodies, including PensionScope and the Pension Fund Operators Association of Nigeria (PenOp), among others.