In a sweeping regulatory move aimed at tightening compliance and protecting workers’ benefits, the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have jointly warned insurers, employers, and service providers against engaging with companies that fail to meet pension and insurance obligations.
The directive, issued through 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, mandates strict adherence to the Pension Reform Act (PRA) 2014 and the newly enacted Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The circular reinforces compliance with the Contributory Pension Scheme (CPS) and the statutory requirement for employers to maintain Group Life Assurance (GLA) coverage for all employees.
Regulators Step Up Enforcement
Under Section 2 of the PRA 2014, every employer in both public and private sectors must enroll staff under the CPS, remit deducted pension contributions within seven working days of salary payment, and provide life insurance policies for their workforce.
However, despite repeated enforcement efforts, many employers — including firms in the financial services sector — have continued to flout these legal provisions.
PenCom disclosed that it has engaged Recovery Agents to audit erring employers, impose administrative penalties, and recover unremitted pension funds through legal channels.
The sustained pattern of non-compliance, according to both regulators, poses a growing threat to the credibility and long-term sustainability of the country’s pension and insurance systems — prompting the new joint enforcement framework.
New Rules: No Certificate, No Contract
The fresh directive now makes compliance certification a mandatory prerequisite for all business dealings in the insurance sector.
All Licensed Insurance Companies (LICs) must obtain valid Pension Clearance Certificates (PCCs) from PenCom and Group Life Assurance Certificates in line with NIIRA 2025 before they can undertake any operational or investment activity.
Similarly, all vendors, service providers, and counterparties seeking to transact with insurance firms are now required to hold valid PCCs and GLA Certificates as a precondition for contractual engagement.
The compliance requirement extends to investment transactions such as bond issuances, commercial papers, and bank placements. Counterparties must sign a Compliance Attestation, confirming that their vendors and partners are also fully certified.
Compliance Embedded in Every Deal
According to the circular, “This cascading requirement effectively embeds pension and insurance compliance throughout the investment value chain, ensuring that no entity within the insurance ecosystem operates outside the law.”
Insurance companies are now expected to incorporate these compliance checks into their vendor selection, due diligence, and risk assessment frameworks. The policy also requires parent companies, subsidiaries, holding firms, and institutional shareholders in the insurance sector to demonstrate full compliance before any new business approval.
With this directive, PenCom and NAICOM have signaled a tougher stance on regulatory enforcement — effectively making “No Compliance, No Contract” the new rule of engagement for Nigeria’s insurance and pension industries.
