The Nigerian Content Development and Monitoring Board (NCDMB) and the National Insurance Commission (NAICOM) have signed insurance services guideline which will oblige the oil and gas industry to patronize the local insurance sector, thereby retain spend in the economy. The guidelines will also address 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 deals with insurance of oil and gas activities.
The Executive Secretary, NCDMB, Simbi Kesiye Wabote and the Commissioner for Insurance, Mr. Sunday Thomas signed the guidelines recently on behalf of their organisations in Yenagoa.
In his remarks, the Executive Secretary 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 insure all insurable risks related to its oil and gas business with an insurance company, through an insurance broker registered in Nigeria.
He stressed further that the 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 before the issuance of the 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 spend in the Insurance industry as it relates to oil and gas activities in Nigeria is retained in-country.
In his words, “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 so as to capture significant financial spend under oil and gas insurance services in country.”
The NCDMB chieftain said the collaboration between 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 percent Nigerian Content by 2027 under the Board’s 10-Year Strategic Roadmap.
He added that finer details of the guidelines will be released at the Nigerian Content Seminar at the 2022 Nigerian Oil and Gas Conference scheduled for July 2022.
In his comments, 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 create an enabling environment that will consistently enhance increased capacity of the Insurance Institutions both financially and technically.