PenCom, NAICOM Order Full Compliance with Pension, Insurance Laws
By Patience Ikpeme
The National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have jointly ordered insurance firms and their business partners to fully comply with Nigeria’s pension and insurance regulations or face sanctions.
The 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, sets out a coordinated enforcement plan to ensure adherence to the Pension Reform Act (PRA) 2014 and the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
According to the circular, the directive aims to promote full compliance with the Contributory Pension Scheme (CPS) and the statutory requirement for all employers to maintain Group Life Assurance (GLA) coverage for their employees. Section 2 of the PRA 2014 mandates every employer in the public and private sectors to remit pension deductions not later than seven working days after salary payment, and to provide valid life insurance cover for all employees.
PenCom noted that despite repeated enforcement efforts, several employers — including some within the financial services sector — have continued to breach these obligations. “Recovery Agents have been deployed to audit and recover outstanding pension contributions and penalties,” the Commission stated, adding that “persistent defaults have continued to undermine the credibility of the Contributory Pension Scheme.”
To strengthen enforcement and close compliance gaps, the two regulators have introduced a new framework that ties pension and insurance compliance to every operational and investment activity within the insurance industry.
“Going forward, all Licensed Insurance Companies (LICs) are required to obtain valid Pension Clearance Certificates (PCCs) from PenCom and Group Life Assurance Certificates compliant with NIIRA 2025 before carrying out any operational or investment activity,” the circular read.
In addition, the regulators directed that vendors, service providers, and counterparties seeking to transact with insurance companies must possess valid PCCs and GLA Certificates as preconditions for business engagements.
The new directive also extends to investment activities such as commercial paper issuance, bond placement, and banking transactions. All parties involved in such transactions must now submit Compliance Attestations confirming that their vendors are fully compliant with pension and insurance obligations.
This approach, according to the joint circular, is designed to embed a cascading compliance structure across the insurance ecosystem. It ensures that “all stakeholders — from insurers to vendors — operate strictly within the law,” thereby fostering a transparent and accountable financial environment.
PenCom and NAICOM have provided a six-month transition window for the full implementation of the directive. Within this period, insurance firms are expected to update internal policies, review vendor relationships, and align their governance frameworks to meet the new regulatory requirements.
The regulators assured that after the transition period, any company or entity found to be non-compliant will face appropriate sanctions as provided under the PRA 2014 and NIIRA 2025.
By tightening enforcement through this inter-agency collaboration, PenCom and NAICOM seek to ensure that pension remittances and insurance obligations are not only statutory in name but effectively implemented across all levels of Nigeria’s financial system.
