In an unprecedented enforcement push, the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have jointly mandated all insurance companies to sever business ties with employers who fail to meet statutory pension and life insurance obligations.
The directive — contained in a Joint Circular signed by PenCom’s Director of Surveillance, Abdulrahaman Muhammad Saleem, and NAICOM’s Director of Legal, Enforcement and Market Development, Dr. Talmiz Usman — marks one of the strongest coordinated regulatory actions yet between the two institutions.
According to the circular, the move is designed to enforce full compliance with the Pension Reform Act (PRA) 2014 and the Nigerian Insurance Industry Reform Act (NIIRA) 2025, both crucial to safeguarding employee benefits and improving governance within the financial services space.
“The era of partial compliance is over,” Saleem declared. “Any company that fails to meet its pension or insurance obligations will not be permitted to transact business within the regulated space. We are embedding compliance at every operational level.”
Despite years of audits and sanctions, PenCom noted that widespread violations — including among financial-sector firms — continue to undermine trust in the pension system. Under the PRA 2014, employers must remit pension contributions within seven working days of salary payment and secure Group Life Assurance (GLA) for all employees.
To tackle persistent defaults, PenCom revealed it has engaged Recovery Agents to trace and recover overdue remittances and penalties.
Usman stressed that the new collaboration signals a departure from leniency: “Compliance is not optional; it is the foundation of trust and sustainability in both the pension and insurance industries.”
Under the new rules, Licensed Insurance Companies must hold valid Pension Clearance Certificates (PCCs) from PenCom and current GLA Certificates under NIIRA 2025 before entering any business or investment arrangement. Vendors and service providers seeking to work with insurance companies must meet the same requirements.
In addition, all investment-related transactions — from commercial papers to bond issuances and bank placements — must involve counterparties capable of providing a Compliance Attestation confirming their own vendors and subcontractors are also fully compliant. Analysts say this “compliance ripple effect” will close long-standing loopholes in the insurance ecosystem.
The circular further directs insurance firms to embed these compliance checks into internal governance, vendor procurement, due diligence, and risk assessment frameworks. Parent companies, subsidiaries, and institutional investors must also demonstrate full compliance before receiving approval for new transactions.
To allow firms to reorganise, PenCom and NAICOM have granted a six-month transition window for companies to update policies, educate vendors, and report progress.
Industry observers have hailed the directive as a watershed for corporate accountability. “This move will raise the bar for transparency and force employers to respect workers’ rights,” one analyst noted.
As the transition period begins, both regulators maintain that violations will attract strict sanctions.
“We are committed to protecting workers’ pensions and ensuring the integrity of our insurance system,” Saleem affirmed. “Non-compliant employers will have no place in Nigeria’s regulated financial landscape.”
