The National Insurance Commission (NAICOM) has issued additional regulatory requirements for life insurance companies carrying on annuity business in the country.
A circular by the commission in Abuja reveals that insurance companies would be required to have at least one qualified actuary responsible for their Assets-Liability Matching (ALM) analysis and implementation.
‘An annuity is a form of insurance or investment entitling the investor to a series of annual sums’
The commission said insurance companies would be required to submit their ALM reports quarterly. Adding that
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 stated that 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 noted that the circular would take effect from February 1.
Adding that insurance companies are expected to comply with the new requirements to ensure a stable and secure annuity business in the country.
Noting that, 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
