The controversy between the National Insurance Commission (NAICOM) and the National Pension Commission (PenCom) over regulation of annuity business have been rested, as both regulators have finally agreed on a model, which mandates life insurers to proceed to open operational accounts with Pension Fund Custodians (PFCs) of their choice.
They have also agreed that all new annuities purchased or being processed shall therefore be domiciled in the dedicated account with the PFC, while the treatment of all existing retiree life annuity funds and assets would be dealt with upon issuance of the Joint Regulations, expected in the next three months.
In joint circular issued on Thursday signed by Agbola Pius, director, Authorization and Policy, National Insurance and BM Umar, head, Surveillance Department, PenCom, they notified members of the public and in particular stakeholders in the Insurance and Pension industries, that both regulators have met to discuss issues pertaining to strengthening the administration of retiree life annuity as a mode of retirement benefit under the Pension Reform Act 2014 (PRA 2014).
“Specifically, both NAICOM and PenCom re-affirmed the existence of Programmed Withdrawal and Life Annuity as modes of payment of retirement benefits under the PRA 2014.”
“We are currently reviewing the Regulation on Retiree Life Annuity which will be jointly released to the public in compliance with the PRA 2014 within 3 months of this notice.”
According to the circular, NAICOM shall ensure that Life Insurance companies comply with the above requirements.
The statement further stated that the processing and approvals of new retiree life annuity requests shall continue forthwith, while directing that all Pension Fund Administrators (PFAs) shall resume the processing of new annuity requests for retirees and forward same to PenCom for necessary approval without delay.
“PenCom shall ensure that PFAs transfer all approved premium for Retiree Life Annuity to the Operational Accounts opened by the Life Insurance Companies with PFCs.”