The Nigerian Content Development and Monitoring Board (NCDMB) and the National Insurance Commission (NAICOM) have jointly presented new insurance services guidelines to stakeholders in the nation’s oil and gas industry.
The latest initiative by the agencies is aimed at ensuring that operators use local risk-underwriting firms to cover their risks in the industry.
Specifically, the guidelines will oblige the oil and gas industry operators to cover their operational risks with local insurance, thereby retaining some of their insurance premiums in the country, and plugging
loopholes that had been identified while implementing the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
The new guidelines was jointly presented by the Executive Secretary of the NCDMB, Mr. Simbi Wabote, and Commissioner for Insurance, NAICOM, Mr. Sunday Thomas, on Monday to industry stakeholders at the 2022 Nigerian Oil and Gas Conference (NOG) in Abuja.
The NCDMB boss explained that the provisions of sections 49 and 50 of the NOGICD Act required all operators engaged in any form of activity in the hydrocarbon resources sector to insure all insurable risks related to its business with an insurance company, through an insurance broker registered in Nigeria.
According to him, 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.
Wabote said that the insurance guidelines was developed by the two regulatory agencies “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.”
He further explained that the insurance commission, before the issuance of its approval to operators, must ascertain that local capacity had been fully exhausted.
The NCDMB’s boss maintained that the guidelines would strengthen the board’s local content drive and ensure that a greater proportion of the operators’ expenditure in the insurance industry as it relates to oil and gas activities is retained in the country.
Speaking at the event, the Commissioner for Insurance urged all stakeholders in the industry to ensure compliance with the relevant laws and the just published insurance guidelines.
