The National Insurance Commission (NAICOM) has announced plans to issue supplementary guidelines for the annuity business in Nigeria, as part of ongoing efforts to strengthen regulation and protect annuitants. The development was disclosed during the 18th meeting of the Insurers Committee on Wednesday by Mr. Moruf Apampa, Vice Chairman of the committee’s Subcommittee on Communication and Stakeholder Engagement.
Earlier this year, NAICOM introduced revised regulations for annuity operations, which took effect on February 1, 2025. The new supplementary guidelines aim to further stabilise the sector and address gaps observed in recent months.
Apampa noted that the additional regulations are intended to safeguard the interests of annuitants and enhance confidence in the insurance industry. According to him, the move is also designed to prevent operational failures among insurers involved in annuity contracts.
Providing further context, another member of the subcommittee and NAICOM spokesperson, Abba Inuwa, explained that the supplementary guidelines are a proactive response to evolving conditions in the insurance landscape. He stressed that regulatory frameworks must adapt to close loopholes and ensure the sustained integrity of the annuity market.
An annuity is a financial contract between an individual and an insurance company, where the insurer agrees to make periodic payments to the insured, either immediately or at a future date, in exchange for a lump sum or series of instalments. The arrangement typically guarantees a fixed income for life.
NAICOM’s earlier guideline mandated all insurance firms engaged in annuity business to appoint at least one qualified actuary responsible for asset-liability matching (ALM). In cases where insurers lack in-house actuaries, the guideline allows for outsourcing to an external actuarial firm for a maximum of two years, subject to extension with the commission’s approval. Actuaries, whether internal or external, must be approved by NAICOM and are required to sign off on all ALM reports in accordance with the Prudential Guidelines.
In addition to annuity-focused regulation, the commission is working on other strategic guidelines to support broader economic and technological shifts. Apampa revealed that new frameworks for InsurTech operations and cyber risk insurance are underway. He said the insurance industry must align with the rise of technology-driven firms and provide adequate coverage for emerging digital risks.
The issue of claims payment also featured prominently in the committee’s discussions. Apampa highlighted NAICOM’s continued monitoring of outstanding claims and noted that the Commissioner for Insurance, Mr. Olusegun Omosehin, had commended the industry for recent improvements in claims settlement performance. Efforts are also being made to streamline the claims process for third-party motor insurance, as part of NAICOM’s broader consumer protection agenda.
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