Insurers given six months to perfect annuity irregularities

The National Insurance Commission (NAICOM) has given life insurance operators six months to comply with a new annuity guideline released by the commission.

An annuity is a form of insurance or investment that entitles the investor to a series of yearly sums.

A circular by the commission at the weekend said that 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 every quarter.

NAICOM said the reports would be submitted with required actions by insurers depending on the results from specific analyses applying guidance provided in the Standards of Actuarial Practice (NSAP).

The commission noted that insurance companies that are unable to cover the additional expenses imposed by the circular would be required to transfer their annuity portfolios to another suitable insurance company within 180 days.

NAICOM said the circular would take effect from February 1.

According to the 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 stated.