Abuja, Nigeria – The National Insurance Commission (NAICOM) has issued fresh regulatory guidelines for life insurance companies operating annuity businesses in Nigeria, with the new rules taking effect from February 1, 2025.

In a circular dated January 29, 2025, and signed by A.I. Adamu, Director of Innovation & Regulation, NAICOM outlined additional requirements aimed at strengthening best practices in the management of annuity portfolios. The directive was addressed to the Managing Directors and Chief Executive Officers of all Life Insurance companies.

Key Provisions of the New Guidelines

One of the central mandates in the revised regulations is the requirement for insurance companies to have at least one qualified actuary responsible for asset-liability matching (ALM) analysis and its implementation within their investment teams.

“An insurer that does not have an in-house qualified actuary shall make arrangements for a qualified actuary from an external actuarial firm to take on the ALM responsibility for an interim period of no more than two years. Any extension beyond this period will require the Commission’s approval,” the circular states.

Additionally, the appointment of an in-house or external actuary—who will sign off on ALM reports—must receive prior approval from NAICOM.

Quarterly and Monthly Reporting Requirements

Under the new rules, insurance companies must submit ALM reports quarterly to the Commission. However, for companies with an annuity portfolio of more than 1,000 annuitants or a portfolio value exceeding N5 billion, monthly ALM reports must be submitted no later than the 15th of the following month.

Failure to comply with these reporting requirements could result in regulatory actions by NAICOM.

Financial Viability and Portfolio Transfer Clause

NAICOM has also stipulated that insurance companies unable to meet the additional financial obligations imposed by these new guidelines must transfer their annuity portfolios to another qualified insurance company within 180 days.

The Board of Directors of each insurance company will be held responsible for ensuring full compliance with these regulations.

Industry Implications

The introduction of these stricter measures signals NAICOM’s commitment to improving financial stability, transparency, and risk management in Nigeria’s insurance sector. Analysts believe the new framework will enhance consumer confidence in annuity products while ensuring that insurers maintain robust financial health.

The new regulations are expected to prompt restructuring within the life insurance industry, particularly for companies that may struggle to meet the requirements. Meanwhile, NAICOM has reaffirmed its stance on ensuring compliance and protecting policyholders’ interests.