The National Insurance Commission (NAICOM) and Nigerian Content Development and Monitoring Board (NCDMB) unveiled the Guidelines on Submission of Insurance Programme By Operators, Project Promoters, Alliance Partners and Indigenous Companies In the Oil and Gas Industry.
Speaking during the launch in Yenagoa, Bayelsa State, the Commissioner For Insurance, CFI, has implored all stakeholders in the oil and gas content to adhere and complied to the rules and laws guiding it in order to development the insurance industry
Recalled that the Guidelines for Oil & Gas Insurance Business was issued in 2010 which amongst others, stipulates the roles and responsibilities of insurance institutions in ensuring compliance with local content law.
“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”, he beaconed.
The purpose for which the federal government pulled the stringer together, Thomas stated that it was done with the primary consideration of ensuring that available In-Country Insurance Capacity is fully filled before any foreign consideration.
“The overall aim of the guideline is the development of indigenous content through increased indigenous participation. The NOGICD Act 2010 was therefore applauded by the entire insurance industry as it greatly complemented the National Insurance Commission roles and responsibilities in performing its regulatory and supervisory oversight function.”.
Elated about the collaboration, the CFI said the joint Guidelines which is today 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.
Representing the industry at the event were Commissioner for Insurance, Sunday Thomas, the Deputy Commissioner for Insurance, Technical, Alh. Sabiu Bello Abubakar, NAICOM Director, Policy and Regulations, Mr. Leonard Akah, the Chairman, Nigeria Insurers Association, Mr. Ganiyu Musa and Mr. Tunde Oguntade, who repesented the President of Nigerian Council of Registered Insurance Brokers.
Also, txecutive Secretary of NCDMB, Engr. Simbi Wabote, stated that the Insurance Guidelines addresses loopholes that have been identified by the Board in implementing the provisions of the NOGICD Act, particularly sections 49 and 50.
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.”
The Nigeria Oil & Gas Industry Content Development, 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.”
Wabote stated that “The essence of the above provisions of the NOGICD Act was to ensure the full utilisation 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.”
“It is believed 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,” he added
He reiterated that the Insurance Guidelines, drawn up by the two government agencies, will lead to more value addition and usage of Nigerian insurance firms and insurance brokers registered in Nigeria.
Wabote also pointed out that the launch of the Insurance Guidelines marks the first step in the implementation of the Guidelines, adding that the representatives of both government agencies have finished drafting the framework implementation plan.
He maintained that the Insurance Guidelines is another step by the Board of NCDMB to attaining 70 percent Nigerian Content by 2027 under the Board’s 10-Year Strategic Roadmap.
Wabote added that the Board of NCDMB is delighted to collaborate further with NAICOM to 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.
“We will further dissipate information about the new Insurance Guidelines during the Nigerian Content Seminar session at the 2022 Nigerian Oil and Gas Event scheduled for next month, 4th to 7th July 2022 in Abuja,” he assured.