In a decisive move to enforce Nigeria’s pension and insurance laws, the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have jointly directed all insurance firms to stop doing business with employers who fail to meet statutory pension and insurance obligations.
The directive, issued in a Joint Circular signed by Abdulrahaman Muhammad Saleem, Director of Surveillance at PenCom, and Dr. Talmiz Usman, Director of Legal, Enforcement and Market Development at NAICOM, seeks to strengthen compliance with the Pension Reform Act (PRA) 2014 and the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The circular reaffirms that every employer under the Contributory Pension Scheme (CPS) must remit employees’ pension deductions not later than seven working days after salary payment and provide Group Life Assurance (GLA) coverage for all staff.
Despite several audits and sanctions by PenCom, many employers— including some in the financial sector— have continued to default on these legal requirements.
To tackle this, PenCom has appointed Recovery Agents to audit and sanction defaulters, recover outstanding contributions, and pursue judicial actions. The continued non-compliance, according to the commission, threatens the sustainability and credibility of the CPS, prompting a coordinated enforcement strategy with NAICOM.
Under the new directive, all Licensed Insurance Companies (LICs) must now present a valid Pension Clearance Certificate (PCC) issued by PenCom and a Group Life Assurance Certificate compliant with NIIRA 2025 before engaging in any operational or investment activity.
Similarly, vendors, service providers, and business partners seeking contracts with insurance firms must also show valid PCCs and GLA Certificates as proof of compliance.
The rule extends to investment transactions such as commercial papers, bond issuances, and bank placements, where all counterparties will be required to sign a Compliance Attestation, confirming that their partners and vendors are also compliant.
This cascading requirement ensures that compliance with pension and insurance laws is enforced across the entire insurance value chain— preventing non-compliant entities from participating in the sector.
Insurance companies are also mandated to incorporate these compliance conditions into their internal policies, vendor selection, due diligence, and investment risk assessment frameworks. Parent companies, subsidiaries, holding firms, and institutional shareholders of insurance entities must also demonstrate full compliance before any business engagement is approved.
Recognising the operational changes required, PenCom and NAICOM have approved a six-month transition window from the date of the circular for full implementation.
During this period, insurance companies are expected to realign their internal systems, communicate the new compliance standards to their partners, and update their corporate governance policies accordingly.
The joint enforcement measure marks one of the strongest steps yet by the two regulatory agencies to ensure integrity, transparency, and accountability within Nigeria’s pension and insurance sectors.
