By Patience Saghana
The National Insurance Commission (NAICOM) and the Pension Commission (PENCOM) have collaborated to deepen insurance penetration in the country.
The two bodies at the conclusion of a two-day training programme held in Lagos forÂ life insurance companies, pension fund administrators and pension fund custodians aimed at promoting life annuity as a retirement option in line with the Pension Reform Act 2004.
Mr. Fola Daniel, Commissioner for Insurance said that the opportunity afforded by the provisions of the Act will be well utilised to achieve the desired purpose and enhance the status of the insurance sector as a driver of the nationâ€™s economy and its social restructuring. Daniel represented by Mr. Sunday Thomas, NAICOM Director in charge of Inspection, drew the attention of all operators to the fact that their roles and responsibilities as contained in the regulation be carried out with the highest sense of responsibility and commitment. â€œWe cannot afford to fail in delivery on the mandate,â€ he said.
To the insurance industry, he said, so much was expected of them in terms of service standard including development of products that meet the needs of retirees, record-keeping, and periodic returns to be rendered, prompt payment of annuity, and responsible investment programme.
â€œI assure you that while the National Insurance Commission will do all within its powers to create the needed conducive environment for your effective operations, it will not tolerate any act that is capable of jeopardizing or compromising the interest of the annuitants and other interested parties.
â€œAny unethical conduct will be promptly dealt with in such a manner that the interest of the annuitants will remain protected,â€ Daniel said.
Section 4(1)(b) of the Pension Reform Act 2004 allows a retiree to utilise the balance standing to the credit of his retirement savings account, RSA, for annuity-for-life purchased from a life insurance company licensed by NAICOM, with monthly or quarterly payments.
In other words, the retiree pays the balance on his RSA (either wholly or in part) to a life insurance company in exchange for a stream of income to be received as retirement benefits from the insurance company till death.
Mr. Muhammad Ahmad, the Director-General of PENCOM said that as part of the collaborative efforts between NAICOM and PENCOM, a joint committee had been constituted which had worked on some of the provisions of the Pension Reform Act 2004 on insurance related matters.
Ahmad represented by PENCOM Commissioner (Technical), Mrs. Eyamba Henshaw, noted that life annuity is a new development in Nigeria, therefore in the area of product design, â€œthere is the need to consider the extent of standardisation that is required for retirement annuity products.
â€œThere would also be the need to balance this with the extent of flexibility and options available to retirees to make room for choices.â€