NAICOM issues additional guidelines for annuity business

The National Insurance Commission (NAICOM) has issued additional regulatory requirements for life insurance companies carrying on annuity business in the country. An annuity is a form of insurance or investment entitling the investor to a series of annual sums. A circular by the commission in Abuja on Friday said insurance companies would be required to have at least one qualified actuary responsible for their Assets-Liability Matching (ALM) analysis and implementation.
The commission said insurance companies would be required to submit their ALM reports quarterly.
NAICOM said the reports would be submitted with requirements outlined in the circular, such as required actions by insurers depending on the results from specific analysis applying guidance provided in the Standards of Actuarial Practice (NSAP). The commission said insurance companies that were unable to cover the additional expenses imposed by the circular would be required to transfer their annuity portfolio to another suitable insurance company within 180 days.
NAICOM said the circular would take effect from February 1. According to NAICOM, insurance companies are expected to comply with the new requirements to ensure a stable and secure annuity business in the country. ”Insurance companies are required to comply with the new requirements, with the board of directors responsible for ensuring strict compliance. The circular aims to enshrine best practices in the management of annuity portfolios by insurance institutions in furtherance to ensuring a safe, sound, and stable insurance
sector,” it said.