National Insurance Commission(NAICOM) and the National Pension Commission (PenCom) on behalf of the Federal Government have released a joint agreement that will modulate Annuity business in Nigeria.
Annuity Policy is a financial institution that gives periodic payments to a person who has previously made periodic payments to the insurance company, in this case, Royal Exchange from a predetermined date, which is either immediate or long term.
Eight of the 26 life insurance companies were successfully approved to run annuity business in Nigeria.
The approved firms includes; AXA Mansard Insurance Plc, Niger Insurance Plc, Standard Alliance Insurance Plc, Custodian Life Limited, Leadway Assurance Limited, Cornerstone Insurance Plc and FBN Insurance Limited.
More insurers, are expected to be licensed in the coming weeks, as the remaining 18 life insurers are making frantic step to sign the service agreement with their respective Pension Fund Custodians (PFCs)
Currently, Annuity Funds stands at N167.8 billion, but with this approval, the volume is expected to rise rapidly in the coming months, as more retirees are now considering Annuity option at the expense of Programmed Withdrawal.
The life insurance firms had earlier been restricted to take fresh annuity business until they sign a service agreement with their PFCs, but now, the successful eight underwriters can accept fresh annuity business from retirees, having complied with the new guideline.
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