Chuks Udo Okonta
Many Life insurance companies have transferred their annuity assets to Pension Fund Custodians (PFCs) in line with directives issued by the National Pension Commission (PenCom) just two days to the deadline, Inspen can report.
Our findings revealed that while many have completed the transfer process, some are still putting finishing touches so as to meet the February 3 2017 deadline.
Some of the operators told Inspen that they have completed the process while an operators said: “We have commenced the process and about to finalise,”
The Director-General Nigerian Insurers Association (NIA) Sunday Thomas, who has been at the fore-front engaging PenCom to revise the directives, seemed to be unaware that many life insurers have gone to comply with the directives.
He noted that he is not aware that any company has complied. “I am not aware that any company has complied except if any voluntarily did that before the PenCom circular,” he said.
A source in the National Insurance Commission (NAICOM) was also dazed to hear that some companies have complied.
Recall that PenCom had on November 3, 2016 issued 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, 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.