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Chuks Udo Okonta
The National Insurance Commission (NAICOM) said the Retiree Life Annuity (RLA) depicts marginal growth as the portfolio recorded 83,917 contracts purchased for a total premium of ₦376,585,316,488.84 as at end of Q2, 2020, which depicts 2.69 per cent and 1.58 per cent growth in count and volume, respectively in Q2, 2020 from end of Q1, 2020, while the industry fund portfolio grew by 15.34 per cent from ₦401,513,860,403.49 in Q1, 2020 to ₦463,104,007,353.66 at the end of quarter under review.
NAICOM noted that the growth year on year during the last three years for RLA business averaged 25.45 per cent in volume, while RLA fund portfolio growth has averaged 37.22 per cent notwithstanding the RLA payouts made (i.e. cumulative total payments of ₦167,209,437,755.05 as at end of Q2, 2020).
The graph of the annuity payouts, premium receipts and portfolio fund balance depicts a clear representation with the fund balance (i.e. ₦463,104,007,353.66) being higher than the cumulative premium amounts received (i.e. ₦376,585,316,488.84) notwithstanding the cumulative annuity payouts earlier stated, NAICOM posited.
Further analysis of the periodical increments in the cumulative premium amounts received and RLA fund portfolio respectively, the insurance sector regulator said, depicts the growth rate for premium receipts is receding while the growth rate for the portfolio fund balance is volatile. This could be attributed to the volatility in interest rate.
According to NAICOM Retiree Life Annuity can be purchased from a Life Insurance Company licensed by the National Insurance Commission (NAICOM) and authorize to sell RLA under the regulation on retiree life annuity.