The National Insurance Commission (NAICOM) has given life insurance operators six months to fully comply with new annuity guidelines introduced to ensure the sector’s stability. Effective from February 1, 2025, the new regulations require insurance companies to appoint at least one qualified actuary to oversee assets-liability matching (ALM) and submit quarterly reports to NAICOM. The aim is to strengthen the management of annuity portfolios and uphold best practices within the insurance industry.
NAICOM’s circular stipulates that insurance companies must submit their ALM reports along with required actions based on specific analyses, adhering to the Standards of Actuarial Practice (NSAP). The commission emphasized that insurers failing to meet the new financial obligations would be required to transfer their annuity portfolios to another company within six months.
This directive is part of NAICOM’s broader effort to establish a stable and sound annuity market in the country. It ensures that insurance companies maintain adequate measures for safeguarding investors’ interests and adhering to industry standards. By imposing these requirements, NAICOM aims to mitigate risks and enhance the sustainability of the annuity business.
The circular also mandates that the board of directors of insurance companies be responsible for ensuring compliance with the new guidelines. This policy change reflects the commission’s commitment to fostering a more secure and well-regulated insurance environment, especially concerning long-term investments like annuities.
NAICOM has expressed that this move is essential to building public confidence in the insurance sector. The implementation of these measures is expected to promote better governance, improve operational efficiency, and align insurers with international best practices, ensuring that annuity products remain secure and beneficial for policyholders.
Source: The Guardian