By Adedapo Adesanya
The National Insurance Commission (NAICOM) has said the Retiree Life Annuity (RLA) industry fund grew in the second quarter of the year by 15.3 per cent to N463.1 billion as against N401.5 billion in the preceding quarter.
This came as the volume of the portfolio grew by 2.7 per cent to 83,917 contracts at the end of the period. This was purchased for a total premium of N376.6 billion as at the end of the quarter, indicating a 1.6 per cent growth from N370.6 billion.
The insurance sector regulator noted that the year-on-year increase during the last three years for RLA business averaged 25.5 per cent in volume, while RLA fund portfolio growth has averaged 37.2 per cent aside the RLA payouts made (i.e. cumulative total payments of N167.2 billion as at the end of Q2, 2020).
The regulator said the periodical increments in the cumulative premium amounts received and RLA fund portfolio respectively depicts that the growth rate for premium receipts is receding while the growth rate for the portfolio fund balance is volatile.
NAICOM said “the graph of the annuity payouts, premium receipts and portfolio fund balance depicts a clear representation with the fund balance (i.e. N463,104,007,353.66) being higher than the cumulative premium amounts received (i.e. N376,585,316,488.84) notwithstanding the cumulative annuity payouts earlier stated,” attributing this to the volatility in interest rate.
According to the agency, Retiree Life Annuity can be purchased from a life insurance company licensed by NAICOM and authorised to sell RLA under the regulation on retiree life annuity.
Recently, the insurance regulator and the National Pension Commission (PenCom), which regulates the pension sector, signed a Memorandum of Understanding (MoU) to revise regulations on Retiree Life Annuity, the guidelines on group life insurance policy for employees and Contributory Pension Scheme (CPS) Retiree Pack.
The focus was to guide stakeholders to make an informed decision, ensure the safety of Retiree Life Annuity funds and assets, address concerns of mis-selling and de-marketing by pension and insurance operators in the country.
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