Starting February 1st 2025, insurance companies in Nigeria must now have at least one qualified in-house actuary to carry out their statutory Asset-Liability Matching (ALM) analysis responsibility and oversee the implementation of its adoption by the Investment team of the company. The actuary is to submit a quarterly ALM report to the Commission not later than 15 days after the end of every quarter.
In the circular released on the 29th of January, 2025, the Commission noted that this directive is in line with the Nigerian Insurance Commission’s (NAICOM) drive to develop a safe, sound and stable insurance sector.
Going further, it noted that the intention behind the directives, in furtherance of paragraphs 3.4.1, 3.4.3, 7.3.1-7.3.3 and 8.1.1-8.1.3 of the Prudential Guidelines, is to “enshrine best practices in the management of annuity portfolios by insurance companies.”
Where the insurance company does not have an in-house actuary, it is to employ the services of an external actuarial firm to take on its ALM responsibilities for a period of not more than 2 years, subject to the extension of time granted by the Commission.
Furthermore, the circular directed that where the annuity portfolio of an insurance company has more than 1000 annuitants or a portfolio valued at ₦5 billion or more, such company is to submit a monthly ALM report to the Commission not later than the 15th day of the new month.
Where an insurance company can not comply with these directives, it is to transfer its annuity portfolio to any other suitable insurance company within 180 days from February 1st, 2025.
The NAICOM and the Nigerian insurance industry have been pulling big weights to ensure the safety and development of the industry. In December 2024, the Commission supported a bill for an increase of the minimum capital for insurance houses in the Nigerian Senate.
This bill aims to guarantee the liquidity of insurance companies in Nigeria and that the companies are able to live up to their life assurance and other insurance agreements entered with their customers.