The National Insurance Commission (NAICOM) has announced updated regulatory requirements for life insurance companies offering annuity products across the country.
An annuity is an insurance or investment product that provides the investor with a series of annual payments.
In a circular released in Abuja on Friday, NAICOM stated that all insurance companies managing annuity portfolios must employ at least one qualified actuary. This actuary will be in charge of performing and implementing Assets-Liability Matching (ALM) analyses.
Additionally, insurers are now required to submit their ALM reports to NAICOM on a quarterly basis. These reports must adhere to the specific requirements detailed in the circular, including the necessary actions to be taken by insurers based on the outcomes of the analyses, in line with the guidance provided by the Standards of Actuarial Practice (NSAP).
Should any insurance company find it challenging to bear the extra costs imposed by these new guidelines, NAICOM has mandated that such companies transfer their annuity portfolios to another appropriate insurer within 180 days.
The new guidelines will take effect on February 1, with the expectation that insurance companies will fully comply to maintain a secure and stable annuity business environment in the country. The Board of Directors of each company is responsible for ensuring adherence to these requirements.
The objective of this circular is to establish best practices in the management of annuity portfolios, ultimately contributing to a safe, sound, and stable insurance sector.
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