The National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have issued a joint directive mandating insurance firms and their business partners to fully comply with Nigeria’s pension and insurance laws or risk sanctions.
The new order, contained in a Joint Circular signed by Abdulrahaman Muhammad Saleem, Director of Surveillance at PenCom, and Dr. Talmiz Usman, Director of Legal, Enforcement and Market Development at NAICOM, seeks to strengthen compliance with the Pension Reform Act (PRA) 2014 and the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The circular emphasizes adherence to the Contributory Pension Scheme (CPS) and the statutory requirement for all employers to maintain Group Life Assurance (GLA) coverage for their employees. Under Section 2 of the PRA 2014, employers in both public and private sectors must remit pension deductions within seven working days after salary payment and provide valid life insurance cover for their staff.
Despite repeated warnings, audits, and penalties, PenCom noted that many employers — including some in the financial sector — continue to violate these legal obligations. The Commission disclosed that Recovery Agents had been deployed to audit and recover outstanding pension contributions and penalties but said persistent default had undermined the credibility of the CPS, necessitating stronger enforcement through collaboration with NAICOM.
Henceforth, all Licensed Insurance Companies (LICs) must obtain valid Pension Clearance Certificates (PCCs) from PenCom and Group Life Assurance Certificates compliant with NIIRA 2025 before undertaking any operational or investment activity. Vendors, service providers, and counterparties seeking to transact with insurers must also possess valid PCCs and GLA Certificates as preconditions for business engagements.
The directive extends to investment activities such as commercial paper issuance, bond placement, and bank transactions, requiring all involved parties to submit Compliance Attestations confirming that their vendors also meet pension and insurance obligations.
This cascading compliance rule embeds regulatory adherence throughout the insurance ecosystem, ensuring that all stakeholders— from insurers to vendors— operate within the law.
PenCom and NAICOM have provided a six-month transition window for full implementation, during which insurance firms are expected to update internal policies, conduct vendor reviews, and align their governance frameworks with the new directive.
