Yemisi Izuora
The thorny path to underwrite oil and gas assets by indigenous insurance firms in Nigeria have been cleared after the Nigerian Content Development and Monitoring Board (NCDMB) and National Insurance Commission (NAICOM) signed joint insurance regulations.
The regulations is expected to prompt oil and gas companies to patronise local insurance firms.
The guidelines aimed at addressing loopholes that have been identified while implementing the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, particularly sections 49 and 50, which deal with insurance of oil and gas activities.
The Executive Secretary, NCDMB, Simbi Wabote, and the Commissioner for Insurance, Sunday Thomas, signed the guidelines recently on behalf of their organisations in Yenagoa, Bayelsa.
Wabote, stated that the provisions of sections 49 and 50 of the NOGICD Act require all operators engaged in any form of activity or project in the oil and gas industry to ensure all insurable risks related to its oil and gas business are domiciled with an insurance company, through a broker registered in Nigeria.
He stressed that the Act provides that where an operator seeks to place an insurable risk offshore, written approval of NAICOM must first be sought and obtained and that the commission, before approval must ascertain that local capacity has been fully exhausted.
Wabote reiterated that the Insurance guideline will strengthen the board’s local content drive and ensure that a greater portion of the spending in the Insurance industry as it relates to oil and gas activities in Nigeria is retained.
He explained: “The insurance guideline being launched today was developed by the two regulatory bodies to ensure that government’s intention of promoting insurance services within the country is achieved to capture significant financial spend under oil and gas insurance services in the country.”
The NCDMB boss added that the collaboration between the Board and NAICOM will further ensure the successful implementation of the Insurance Guidelines and every other activity that will lead to the attainment of the objectives of the NOGICD Act, 2010 as well as 70 per cent Nigerian Content by 2027 under the Board’s 10-Year Strategic Roadmap.
He maintained that finer details of the guidelines will be released at the Nigerian Content Seminar of the 2022 Nigerian Oil and Gas Conference scheduled for July 2022.
Speaking on the initiative, the Commissioner for Insurance, NAICOM, Sunday Thomas charged all stakeholders engaged in any form of business, operations or contract in the Nigerian oil and gas industry to ensure compliance with the relevant laws and compliance with the insurance Guidelines.
Thomas expressed optimism that the partnership between the Board and NAICOM will realize the benefits of increased local content, in-country value retention, job creation and employment generation and GDP growth amongst others.
While appreciating the efforts of the Board, the NAICOM boss pledged his agency’s commitment to creating an enabling environment that will consistently enhance the increased capacity of the Insurance Institutions both financially and technically.