PENSION: NAICOM, PENCOM RELEASE NEW GUIDELINES
National Insurance Commission (NAICOM) and National Pension Commission (PenCom) yesterday jointly released a regulation on annuity business in Nigeria, in compliance with provisions of the Pensions Reforms Act 2004.
NAICOM's Commissioner for Insurance (CFI), Mr Fola Daniel, said at the launch that the regulation was formulated to guide all stakeholders on their roles and responsibilities and charged managers of the scheme, including life insurance companies, pension fund administrators and pension fund custodians, to provide excellent services in line with people-oriented agenda of the Federal Government.
'Following the release of the regulation, life insurance companies are expected to rise to the challenges of providing new products and or modifying existing products to align with economic realities and value added needs of retirees.
'It is only through this that they can be competitive and remain relevant in the current dispensation. Life insurance companies are reminded that expansion in the branch network, efficient deployment of information and communication technology and prompt payment of benefits will provide the competitive advantage for the operators.
'Whilst the Commission's repositioning for virile and responsive industry supervision and regulation is continuing, it is my expectation that excellent service will be the watchword of operators through compliance with good ethics and norms, thus making enforcement of rules a distant necessity'.
Daniel recalled that NAICOM and PenCom had in a bid to ensure effective implementation of provision of Section 4.1 (B) of the Act, in line with their regulatory and supervisory responsibilities, set up a joint committee comprising members from both organisations to draft a regulation/guideline for life annuity business in Nigeria.
He listed advantages of the scheme to include continuous flow of regular income for retirees, insulates them from risks associated with the investment of lump sum benefits, and allows for structured management of resources to meet future needs of the retirees, among other benefits.
Under the PRA 2004, acceptable modality for payment of retirement benefits is either through Life Annuity obtained from a life insurance company licensed by NAICOM or programme withdrawal obtainable from PFAs. In his remarks, Director-General of PenCom, Mr. Mohammed K. Ahmad, vowed that the commission would not hesitate to impose sanctions on any stakeholder trying to undermine the regulation.
According to him, 'of course, we expect the highest standard of corporate governance. We expect that each participant will comply with those specific corporate governance issues. Therefore, we expect very transparent, open and fair competition.