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The National Insurance Commission (NAICOM) is set to issue supplementary guidelines for Nigeria’s annuity business, reinforcing its commitment to market stability, policyholder protection, and regulatory responsiveness in the face of emerging sectoral risks.
This disclosure was made during the 18th meeting of the Insurers Committee, held on Wednesday, by Mr. Moruf Apampa, Vice Chairman of the Committee’s Subcommittee on Communication and Stakeholder Engagement.
Earlier in 2025, NAICOM introduced a revised regulatory framework for annuity products, effective February 1, 2025, aimed at restoring order to a segment that had experienced operational lapses and waning consumer confidence.
Apampa stated, “NAICOM is issuing additional guidance on annuity operations. In light of recent industry developments, these measures are being introduced not just to mitigate risk but to rebuild trust and prevent future failures.”
He emphasized that the Commission’s goal is to ensure the long-term sustainability of annuity obligations, and to prevent scenarios where insurers are unable to meet monthly payment commitments to annuitants.
Proactive Regulatory Approach
Also speaking at the meeting, NAICOM spokesperson Abba Inuwa explained the rationale behind the regulatory update. “Regulation is not static. As the environment evolves, so must the rules. These guidelines are a direct response to identified gaps, to preempt future systemic threats in the annuity space,” Inuwa noted.
The upcoming framework seeks to enhance operational soundness and risk oversight within annuity portfolios, which are designed to provide policyholders with guaranteed periodic payments in exchange for a lump sum or structured premium payments.
Actuarial Governance and Asset-Liability Matching
Under the February 2025 regulations, NAICOM introduced stringent actuarial governance mandates, requiring insurers to appoint at least one qualified actuary to oversee asset-liability matching (ALM) functions. This ensures that annuity obligations are sustainably supported by matching investment portfolios.
The guidelines also stipulate that where a company lacks in-house actuarial capacity, it must engage an external actuarial firm—subject to Commission approval—to manage the ALM function for a limited period of up to two years.
“All ALM reports must be signed off by a Commission-approved actuary, as prescribed under sections 3.4.3, 7.3.1, and 8.1.5(m) of the Prudential Guidelines,” the regulation reads.
Tech-Driven Market Reforms on the Horizon
In a move that signals NAICOM’s readiness to embrace innovation-driven regulation, Apampa revealed that the Commission is finalizing market guidelines on InsurTech, aimed at fostering collaboration with emerging tech players in the insurance value chain.
He also confirmed the imminent release of Cyber Risk Insurance Guidelines, in recognition of the rising exposure of institutions to digital threats. “The insurance sector is uniquely positioned to underwrite cyber risks, and NAICOM is taking the lead in shaping a clear regulatory path,” he said.
Progress on Claims Settlement and Enforcement
On the critical issue of claims payment, Apampa acknowledged a visible improvement, commending the industry’s efforts while reinforcing the Commissioner for Insurance’s resolve to eliminate the backlog of outstanding claims.
He also noted that NAICOM is streamlining the claims process for third-party motor insurance, while intensifying public awareness and enforcement of the mandatory coverage.
“The Commissioner has made it clear that claims responsiveness is central to building trust and driving insurance penetration,” Apampa concluded.
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