Insurance

NIA takes annuity battle to National Assembly, Minister of Finance

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From left: Chairman, Technical Committee, Insurance Consumers Association of Nigeria, Adewale Adetoro; Director-General, Nigerian Insurers Association, Sunday Thomas and Chief Executive Officer, JSP Communications, Dr. Phil Osagie at the event.

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Chuks Udo Okonta

The Nigerian Insurers Association (NIA) has taken its battle with the National Pension Commission (PenCom) on transfer of annuity assets to the National Assembly; Secretary of the Federal Government; Minister of Finance and other government agencies.

According to Director-General of the Association, Sunday Thomas, who spoke today at the 2nd Business Journal Insurance Summit 2016, in Lagos, the body has also written PenCom, National Insurance Commission (NAICOM) and the Head of Service on the need to resolve the feud.

He noted that in line with the law, PenCom lacks legal grounds to call for transfer of annuity assets which is different from pension contributions, stressing that he is optimistic, the circular would be withdrawn by the pension regulator.

PenCom said the decision to move annuity assets from life insurance companies to Pension Fund Custodians (PFCs) is to ensure consistency with Pension Reform Act (PRA) 2014 and strengthen the processing of administration of retirement benefits.

A circular entitled: Strengthening the Administration of Retirement Benefits under the Pension Reform Act (PRA) 2014, with reference number PENCOM/INSP/CIR/TECH/16/17, issued on November 3, 2016, to pension fund administrators and Custodians and signed by its Head, Surveillance Department, Muhammad Umar, the pension regulator noted that in line with the PRA 2014, it resolved that the custody of retiree life annuity shall henceforth, be domiciled with PFCs as provided for in Section 56 of the pension act.

PenCom mandated all life insurance companies currently providing life annuity for retirees under the Contributory Pension Scheme (CPS) to open an operational account jointly with a PFC of their choice and advice the commission.

It maintained that all life insurance companies currently providing retiree life annuity under the CPS should transfer the corresponding assets in their possession/custody to the PFC of their choice.

The commission also noted that the approval of new request for annuity should be put on hold with immediate effect, until life insurance companies meet the custody and transfer conditions.

PenCom said life insurance companies are required to open an account with the custodian of their choice and also execute custodial service agreement that shall state the terms and conditions of the contract between the parties.

The circular which detailed the documentation and procedure of the transfer can be obtained from the link below.

Click to access 1478277141_Circular%20on%20Holding%20of%20Annuity%20by%20Custodians0001.pdf

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