In other to ensure adequate protection of retirees opting for annuities at the point of retirement and group life insurance policy holders, regulator of the insurance industry, the National Insurance Commission (NAICOM) and its pension counterparts, the National Pension Commission (PenCom) are embarking on review of the regulations for both products
According to NAICOM, the review which is to ensure that there is effective administration both products will be concluded by March, 2020.
The Commission said prudent administration of Annuity and Group Life Assurance business will ensure adequate protection of enrolled persons.
In this view, there is an ongoing collaboration between NAICOM and PenCom to ensure success of the scheme, as the size of the funds grow bigger and bigger.
Sunday Thomas, acting commissioner for Insurance said recently that with pension assets under management now almost at N10 trillion, a lot of fund will be emtied into the insurance industry through the retiree life annuity.
He said it’s because a lot of retirees were beginning to understand the benefits of annuity and its relevance as a retirement plan.
“We are expecting that a lot of the pensions will be emptied in insurance through retiree life annuity, so there is need to prepare on how to manage these funds to protect the interest of subscribers because it will come with its own challenges, Thomas said.
The Acting Commissioner said that the public was becoming more exposed and knowledgeable about the workings of annuity.
“This we expect will continue, as the future is looking very bright for the business as we have witnessed.
“This has also shown a positive growth in trust and confidence in the sector,” he said.
According to him, the commission is committed to ensuring financial soundness and viability of the insurers and the adequate protection of policy holders at all times.
He said that the commission would continue to ensure that genuine claims were promptly paid, while also ensuring a reasonable protection of investments of shareholders.
“In demonstrating its willingness to protect the policy holders, the commission has further strengthened its Complaint Bureau Unit to respond to public complaints over claims settlement.
“Available statistics have shown that there have been great improvement in this area,” he said.
NAICOM says 2020 is a year to turn around the fortunes of the insurance industry.
Thomas speaking at seminar for journalist with the theme “Strategic Focus of the Commission in Year 2020; From Compliance to Development” held in Kano, North-Western Nigeria said that the turnaround could, however, not be achieved without digital processes, urging all stakeholders in the industry to embrace it.
“As we may all be aware, the industry is currently lagging behind other financial services sectors in this area.
“The Commission is working vigorously to see that all its operations are digitalized.
“The year 2020 is a year for us to turn around the fortunes of the industry, and this cannot be accomplished without digitalizing our processes and encouraging the industry to imbibe same,” he said.
The Acting Commissioner emphasised that the right pricing of insurance products and effective deployment of technology for ease of transaction were among its key areas of emphasis in 2020.
He said that NAICOM would also vigorously pursue the continued implementation of compulsory classes of insurance in every nook and cranny of the country.
Thomas said that the commission was not unaware of the challenges inhibiting the successful implementation of such classes of insurance, but had resolved to work with relevant stakeholders to ensure a seamless drive.
According to him, the successful implementation of compulsory classes of insurance across the nation will ensure adequate protection of strategic national assets:
“We will be working with the relevant security agencies to guarantee effective and efficient monitoring of compliance.”
Thomas said that the commission would continue to deploy more energy and resources in building public trust and confidence in insurance, despite years of poor perception.
He said the annuity business made headlines recently with a boost in the contribution of the business to the sector.
Thomas also revealed that the second phase of the Market Development and Restructuring Initiative (MDRI) would soon be unveiled.
According to him, when released, it will mark out clear targets and tasks for all stakeholders to achieve.
He said that while financial inclusion strategy had been central to the Federal Government developmental plan, the commission had over the years invested hugely in the development of such mechanisms.
Thomas said that investment in this regard include the introduction of Micro insurance and Takaful Insurance products.
He said the introduction of such lines of insurance was intended to deepen the penetration of insurance in the country and bring into the fold majority of the populace that were hitherto excluded.
“So far, some milestones have been recorded in this regard with three standalone Micro insurance and four Takaful insurance companies already granted approvals,” he said.
According to him, the commission will in 2020 continue to introduce new reforms and initiatives in line with international best practices for attaining the level of growth and development desired for the sector.
The Acting Commissioner said that as the year continues to unfold, giant strides would be made by the commission in all aspects of its statutory responsibilities.
Thomas said that the initiative of the commission to recapitalise the insurance sector was a move to ensure that the industry became more robust in its technical competence and financial base.
He said it was also to build confidence, trust and enhance market value.
According to him, this is aimed at repositioning the sector for self-actualisation in terms of growth and development.
“Let me state in clear terms that the recapitalisation process is up and running in line with the road-map and the Commission will see to its logical conclusion come December 31, 2020.
“The task of building an insurance sector of our dreams is a collective one and thus, all hands must be on deck to ensure our dreams become realities,” he said.