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NAICOM Introduces New Annuity Guidelines
The National Insurance Commission (NAICOM) has introduced additional regulatory requirements for life insurance companies managing annuity portfolios in Nigeria.
An annuity is a financial product designed to provide periodic payments to investors over a specific period.
In a circular issued in Abuja on Friday, NAICOM directed insurance firms to appoint at least one qualified actuary responsible for conducting and overseeing their Asset-Liability Matching (ALM) analysis and implementation.
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Additionally, insurance companies must submit ALM reports on a quarterly basis, following guidelines outlined in the circular. These reports must include specific actions insurers need to take, depending on results derived from a detailed analysis in line with the Standards of Actuarial Practice (NSAP).
NAICOM further stated that insurance companies unable to meet the additional financial obligations imposed by the new requirements must transfer their annuity portfolio to another eligible insurance firm within 180 days.
The regulatory body confirmed that the new guidelines will take effect from February 1.Insurance firms are expected to fully comply with these updated requirements, with their board of directors being held accountable for ensuring strict adherence.
NAICOM emphasized that these measures are intended to promote best practices in annuity management, strengthen the insurance sector, and enhance stability in the industry.
