Regulators meeting on annuity fails to hold


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Chuks Udo Okonta

The planned meeting between the National Insurance Commission (NAICOM) and National Pension Commission (PenCom) earlier scheduled for today, has been postponed, Inspen has learnt.

It was gathered that the insurance regulators, NAICOM, requested for postponement of the meeting, which new date is yet to be fixed.

This medium had yesterday, reported that the meeting would hold today, having been told by a source who was aware of the meeting.

The planned meeting was to enable the regulators seek ways to resolve the issue on transfer of annuity assets which had raised tension amongst life insurance operators.

PenCom, had early this month, mandated life insurers to stop annuity business for three months and within the period transfer their annuity assets to PFCs. A decision NAICOM and insurance operators are not comfortable with.

According to PenCom the decision to move annuity assets from life insurers 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.

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