Joy Agwunobi
The National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have jointly issued a new compliance directive to insurance companies and their vendors, mandating stricter adherence to Nigeria’s pension and insurance regulations.
In a circular signed by A.M. Saleem, director of the Surveillance Department at PenCom, and Talmiz Usman, director of Legal, Enforcement and Market Development at NAICOM, the two regulatory agencies announced a six-month transition window for full implementation of the new compliance framework.
The circular, addressed to all licensed insurance companies, aims to strengthen enforcement of the Pension Reform Act (PRA) 2014 and the Nigerian Insurance Industry Reform Act (NIIRA) 2025, particularly provisions relating to the Contributory Pension Scheme (CPS) and Group Life Assurance (GLA) coverage for employees.
According to the circular, despite continuous regulatory engagements and enforcement efforts by PenCom, a significant number of employers across both public and private sectors have continued to default on their statutory obligations under the CPS.These obligations include the timely remittance of pension contributions within seven working days of salary payment and the maintenance of valid Group Life Assurance (GLA) policies for employees.
To tackle recurring non-compliance, PenCom noted that it has already engaged Recovery Agents (RAs) to audit defaulting employers, impose administrative sanctions, and initiate judicial recovery of outstanding contributions and penalties. However, the Commission observed that some entities’ continued disregard for these requirements undermines the objectives of the CPS.
To promote broader compliance, the regulators directed that all licensed insurance companies (LICs) must henceforth possess a valid Pension Clearance Certificate (PCC) issued by the National Pension Commission (PenCom) as evidence of compliance with the Pension Reform Act (PRA) 2014, alongside valid GLA certificates in line with the Nigerian Insurance Industry Reform Act (NIIRA) 2025. In addition, insurance companies are required to ensure that every service provider and vendor they engage with presents a valid PCC issued by PenCom and GLA Certificates compliant with NIIRA 2025. These documents will serve as a mandatory precondition before entering into any service level or technical agreement.
The regulators further emphasised that insurance companies must undertake investments only with firms and financial institutions that uphold the same compliance standards, ensuring their own vendors and service providers also maintain valid PCCs and GLA Certificates. Each counterparty is required to execute a Compliance Attestation affirming its enforcement of these requirements throughout its vendor network. This attestation, which must be renewed annually, will form an integral part of the insurer’s investment documentation.
Furthermore, counterparties engaging in transactions with insurance companies must, at every point of engagement, submit valid PCCs and GLA Certificates obtained from their vendors and service providers. This requirement covers all forms of investment transactions, including but not limited to commercial papers, bond issuances, and bank placements.
Licensed insurance companies are also directed to embed these compliance obligations into their internal policies, vendor selection frameworks, governance structures, due diligence processes, and investment risk assessment procedures.
In addition, the directive extends to the parent companies, subsidiaries, holding companies, and institutional shareholders of licensed insurance companies, all of whom must possess valid PCCs, maintain GLA coverage for their employees, and ensure that their own vendors and service providers comply with the same requirements as a precondition for entering any form of service level or technical agreement.
According to PenCom and NAICOM, the joint directive underscores a renewed regulatory commitment to tightening compliance mechanisms across Nigeria’s insurance and pension sectors. By aligning both industries under a unified compliance framework, the regulators aim to foster transparency, accountability, and long-term financial protection for workers and policyholders across the country.
