PenCom, PenOp set the ball rolling for 25% acquisition residential mortgage

By Favour Nnabugwu
The National Pension Commission (PenCom) and the Pension Operators Association of Nigeria (PenOp) have set the ball rolling for the Retirement Savings Account holders to access their equity contributions for the acquisition of residential mortgage.
At the seminar for Nigerian Association of Insurance and Pension Editors, NAIPE organised by PenOp themed: “Pension: An Opportunity to Own Your Own Home, An X-Ray of the New RSA Plan On Home Ownership, revealed that RSA holder should have contributed for five years (60 months) cumulative of employer and employee’s mandatory contributions.
Presenting the theme paper, the Head of Investment Department, PenCom, Ibrahim Kangiwa, said for contributors under the Contributory Pension Scheme (CPS) to be eligible to use their RSA balance for acquisition of residential mortgages said five contribution is needed to access residential mortgage.
Kangiwa said the same thing was applicable to the contributors under the Micro Pension Plan (MPP), adding that married couples, who individually met the eligibility criteria, are also eligible.
On the authorised limit for equity contribution that qualifies a contributor, Kangiwa put the maximum allowed at 25 per cent of the RSA balance, noting that “where 25 per cent of RSA balance is more than equity contribution, the RSA holder can only access the amount equivalent to equity contribution required.
“Where 25 per cent is not sufficient for equity contribution, RSA holder may utilise Voluntary Contribution (VC) in line with the Voluntary Contribution guidelines.
To make it easier for RSAs to acquire their own house, he further said, “Where 25 per cent is not sufficient for equity contribution, Micro Pension (MP) contributor may utilise contingency portion in line with MP guidelines.
“Where 25 per cent is insufficient as equity contribution, RSA holder shall deposit the difference with the mortgage lender,” Kangiwa explained.
Those exempted from this initiative, according to Kangiwa, include RSA holders that have less than three years to retirement; existing retirees on CPS; exempted persons under the PRA 2014 and RSA holders who do not have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months.
He said that equity contribution was not for refinancing existing mortgage, outright purchase of property and purchase of land, noting that the property shall be for residential purpose only.
Kangiwa said the objective of the initiative was to provide housing for first time home owners and improve the standard of living of RSA holders under the CPS by facilitating their ownership of residential homes during their working life.
PenCom guidelines states that
Application for equity contribution for residential mortgage shall be in person and not by proxy.”
On the maximum withdrawal percentage, PenCom said this must be 25 per cent of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the mortgage lender.
Earlier in his remarks, the President, PenOp/Managing Director, Stanbic IBTC Pension Managers, Olumide Oyetan, emphasised the need for stakeholders to work together to ensure the successful implementation the guidelines.
He said the successful implementation of this initiative would improve people’s welfare and move the country forward.
to qualify for the mortgage,
PenCom confirms 34 approved mortgage banks for residential mortgage …19 from Lagos, 7 from Abuja 

By Favour Nnabugwu
National Pension Commission, PenCom has released a list of 34 approved primary mortgage banks to participate in  the use of the Retirement Savings Accounts, RSAs for residential mortgage
The Director-General of PenCom, Mrs Aishat Dahir-Umar released the list of 34 mortgage lenders that have been approved RSA for their residential mortgage.
Of the 34 banks, 19 are from Lagos, 7 from Abuja and the remaining  8 are from other states.
The mortgage lenders from Lagos are Abbey Mortgage Bank Plc; Brent Mortgage Bank LTD; AG Mortgage Bank Plc; Centage Savings & Loans; City Code Savings & Loans; First Trust Mortgage Bank; Global Trust Mortgage; Haggai Mortgage; Homes-Base Mortgage; Imperial Homes; Jubilee-Life Mortgage Bank; Lagos Building & Investment; Prudential Mortgage Bank and Refuge Homes Savings & Loans.
Others from Lagos include Resort Savings & Loans; Safetrust Mortgage Bank; STB Building Society; Union Homes, Mayfresh Mortgage Bank and Resort Savings & Loans
Those from Abuja are Aso Savings & Loans; FHA Homes Ltd; First Generation Homes; Infinity Trust Mortgage Bank; MDSL Mortgage Bank LTD; Nigeria Police Mortgage Bank and Platinum Mortgage Bank
The remaining are from other states: Akwa Savings & Loans Ltd and Mutual Alliance both from Akwa Ibom; Coop Savings & Loans from Oyo State; Delta Trust Mortgage Bank; Gateway Mortgage Bank, Ogun State; Jigawa Savings & Loans, Jigawa state; Kebbi Stare Homes, Kebbi State and Living trust formally Omoluabi, Osun State
The mortgage firms are divided into two: national with minimum capital requirement of N5bn and state with N2.5bn minimum capital. In all, there are 13 categorised under national while the remaining 21 under state 
It will be recalled that PenCom released guidelines to allow contributors of the Contributory Pension Scheme to access part of their RSAs for payment of equity contribution for residential mortgage.
It stated that this was in line with Section 89 (2) of the Pension Reform Act 2014, which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgage.
The guidelines cover pension contributors in active employment, either as a salaried employee or as a self-employed person.
It noted that the maximum amount to be withdrawn is 25 per cent of the total mandatory RSA balance as of the date of application, irrespective of the value of equity contribution required by the mortgage lender.
PenCom said the applicant must have an offer letter for the property duly signed by the property owner and verified by the mortgage lender.
On criteria for mortgage lenders, the guidelines stated that, “To qualify as a mortgage lender for this purpose, the company must be licensed by the Central Bank of Nigeria, comply with the Contributory Pension Scheme and have valid Pension Clearance Certificate. The commission shall publish names of the eligible mortgage lenders on its website
AM Best affirms A ratings to Africa Re

By Favour Nnabugwu


AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of African Reinsurance Corporation, Africa Re

The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Africa Re balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management (ERM).

Africa Re balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and supported by low underwriting leverage and a conservative investment allocation by asset class.

An offsetting factor is Africa Re’s high exposure to elevated levels of economic, political and financial system risk that are associated with its main operating markets in Africa.

However, AM Best views these risks to be partially mitigated by the company’s good geographic diversification, with reinsurance business well-diversified across the continent and a significant portion of surplus assets held in North America and Europe.

Africa Re has a track record of robust overall performance, evident by a five-year (2017-2021) weighted average return-on-equity ratio (ROE) of 6.6 percent

However, in recent years, results have been negatively impacted by the emergence of foreign exchange losses associated with the devaluation of many African currencies against the U.S. dollar. AM Best notes that the company’s ROE should be viewed in light of its large capital buffers and its reporting currency, the U.S. dollar.

The company has generated robust underwriting performance over the long term, as demonstrated by a 10-year (2012-2021) weighted average combined ratio of 93.9 percent

While non-life underwriting performance was below expectations between 2018-2020, with combined ratios reaching 99.0% in 2020, the company achieved a solid turn-around in 2021 with a combined ratio of 93.4 percent . AM Best expects prospective underwriting performance to benefit from corrective underwriting measures implemented in recent years.

Africa Re is a composite reinsurer, with a primary focus on Africa. The company enjoys privileged market access and strong brand recognition, providing Africa Re with solid long-term growth prospects as the region’s insurance markets and economies continue to develop. AM Best considers Africa Re ERM framework to be aligned with the size and complexity of its operation

Commissioner for Insurance, Sunday Thomas now Fellow of the CIIN

By Favour Nnabugwu
The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM) Mr. Olorundare Sunday Thomas, has been inducted as a Fellow of the Chartered Insurance Institute of Nigeria (CIIN).
The Naicom boss was among the 12 fellows inducted by the institute at its 2022 induction ceremony which took place at the College of Insurance and Financial Management (CIFM) in Asese, Ogun state.
Fellows hold the highest qualification awarded by the Chartered Insurance Institute of Nigeria. Insurance Practitioners are entitled to be a Fellow if they satisfy the Governing Council that for a period of ten years immediately preceding the date of application in that behalf they have been fit persons, and in addition to being an associate must have been in continuous active employment as Insurance Practitioners
Olorundare Sunday Thomas appointment as the substantive Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Nigeria became effective April 30, 2020; having been appointed in acting capacity in Aug 2019
Prior to his appointment, Thomas was the Deputy Commissioner in charge of technical matters at the Commission between April 2017 and August 2019.
An astute insurance professional with vast knowledge and experience in underwriting, regulation and hands-on management of human and material resources spanning over four decades uninterrupted.
During these years, Mr Thomas had traversed the entire insurance sector in Nigeria leaving indelible marks along the way.
It is instructive to note that Thomas was the Director-General of the Nigerian Insurers Association (NIA) between May 2010 and April 2017, brought his experience to bear on the job. It is to his credit that the Association successfully developed and deployed the Nigeria Insurance Industry Database (NIID) platform.
He holds a BSc (Hons) in Actuarial Science and an MBA in Finance both from the University of Lagos. He is also an Associate Member of the Chartered Insurance Institute, London and Nigeria, Member Society of Fellows of the CII London, Member, Nigeria Institute of Management among others.
Speaking during the induction, President of CIIN, Mr. Edwin Igbiti, said since conception, the Institute’s professional examinations have served as a solid foundation for outstanding practitioners to launch and distinguish themselves into the professionalism of the insurance industry.
Igbiti said “This triumph should keep you basking in great joy and sense of achievement because the professional qualifications are a source of pride to the Institute and all its members.
“ It is extremely important to point out that by attaining our professional qualification, you have become custodians of the ethics and codes of practice of our noble profession,”
He submitted that the objective of the Institute’s code of ethics is to set forth the values, principles and standards that will guide the conduct of all insurance practitioners in the country.
He said as lifetime ambassadors of the insurance profession, they should uphold the creed and replicate all that it represents in their endeavours.
“Who you are and the principles you endorse are some of the values that distinguishes you as a leader and an outstanding professional.
“The completion of the Institute’s examination and your induction as an Associate of the Institute is actually the beginning of your quest for knowledge.”
He maintained that as professionals, the quest to keep honing their skills and knowledge gap is highly crucial in this digitalised world, adding that to become an astute professional who will always be relevant in the industry and the economy at large, will require to learn daily and stay at the top of trends and opportunities.