INSURANCE OPERATORS DEPLORE PLANS TO MOVE N164.7BN TO PENSION SECTOR
Life insurance operators in Nigeria may have to brace up to imminent liquidity challenges as they have to move over N164.7bn to the pension industry following a recent joint statement issued by regulators of the pension industry , the National Pension Commission and the insurance regulator, the National Insurance Commission of Nigeria
As published by Nigerian daily newspaper, Thisday on April 5, 2017, the funds include N145.05 billion Annuity assets that they have been mandated to keep as operational account in the custody of Pension Fund Custodians and the N19.7 billion legacy pension funds being demanded by Pension Transitional Arrangement Directorate (PTAD)
While it is important to deal with legacy pension issues and ensure prompt payment of all outstanding pensions, one wonders if such funds must be transferred out of the insurance industry for this plan to be effective.
In a country with low insurance penetration where efforts are on hand to grow the insurance industry and enhance its contribution to the GDP, it appears that in almost all cases involving the industry and other industries or agencies, the insurance industry always seems to come out holding the short end of the stick if not completely shut out.
This must be addressed by regulators and practitioners in order to protect the long term interest, growth and survival of the industry and in order for it to take its rightful place in the financial services sector.