Two regulators, the National Insurance Commission (NAICOM) and the Nigerian Content Development and Monitoring Board (NCDMB) have come up with a joint guideline that will enable enforcement of provisions of the laws that makes its compulsory for risks emanating from Nigeria be placed with registered insurers in the country.
According to both agencies, realising this objective of local content development will among other things lead to increased retention, growth in in-country technical capacity, job creation and employment generation, increased penetration and GDP growth, and human capacity development among others.
Sunday Thomas, commissioner for Insurance, NAICOM during the signing ceremony in Yenagoa, Bayelsa State said that the historical synergy between both agencies has therefore necessitated a veritable platform for inter-agency collaboration in order to give effect to the requirements of Section 49 and 50 of the Nigerian Oil and Gas Industry Content Development (NOGICD Act) 2010.
He said this is by providing necessary guidance to operators in the Oil and Gas for satisfying the provisions of the law in relation to insurance transactions.
Thomas, said the joint guidelines is issued with the objectives of enforcing and strengthening compliance with the provisions of the referenced sections of the NOGICD Act and relevant provisions of the Insurance Act with respect to companies carrying on insurance business in the Nigerian oil and gas industry is to also enable the board monitor utilization of in-country insurance capacity.
“I therefore implore all operators, project promoters, alliance partners and Nigerian indigenous companies engaged in any form of business, operations or contract in the Nigerian oil and gas industry to note that the sighted relevant laws have demanded our adherence and continued compliance, hence the issuance of this guidelines”.
Simbi Kesiye Wabote, executive secretary, NCDMB in his speech at the event said “as we are aware, the combined provisions of sections 49 and 50 require all operators engaged in any form of activity or project in the Oil and Gas industry to ‘’insure all insurable risks related to its oil and gas business…with an insurance company, through an insurance broker registered in Nigeria.’’
He said he NOGICD Act provides that where an operator seeks to place an insurable risk offshore, a written approval of NAICOM must first be sought and obtained and that NAICOM, prior to the issuance of the approval, must first determine that ‘’…local capacity has been fully exhausted.’’
“The essence of the above provisions of the NOGICD Act was to ensure the full utilization of available in-country capacity in the Insurance sector before seeking offshore insurance services. This is expected to support retention of capital in-country and build capacity of Nigerian insurance companies in the oil and gas industry.”
Wabote believes that the implementation of this insurance guidelines will further strengthen the Board’s local content drive and ensure that a greater portion of the spend in the insurance industry as it relates to oil and gas activities in Nigeria is retained in-country.
“I am therefore excited that this Insurance Guidelines, drawn up by the Board and NAICOM, will lead to more value addition and usage of Nigerian insurance firms and insurance brokers registered in Nigeria, he stated.
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