The Nigerian Content Development and Monitoring Board (NCDMB), and the National Insurance Commission (NAICOM), have signed insurance service guidelines that would compel oil and gas operators to patronise the local underwriting firms.
A statement issued yesterday by the NCDMB said the guidelines would help retain insurance spending by the oil and gas industry in the economy.
The Executive Secretary, NCDMB, Simbi Wabote, and the Commissioner for Insurance, Sunday Thomas, signed the guidelines recently on behalf of their organisations in Yenogoa, Bayelsa State.
The guidelines are meant to address identified loopholes 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.
Wabote was quoted as saying that the sections of the Act required all operators engaged in any form of project in the oil and gas industry to insure all insurable risks with an insurance company, through an insurance broker registered in Nigeria.
He said 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 must also ascertain that local capacity has been fully exhausted before the issuance of the approval.
It is to ensure that the 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 the country.
The statement reads: “The insurance guidelines being launched today was developed by the two regulatory bodies.
“It is to ensure that the 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 the country.”
Wabote said the collaboration between NCDMB and NAICOM would 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% Nigerian content by 2027 under the board’s 10-year strategic roadmap.
He added that details of the guidelines would be released at the Nigerian content seminar at the 2022 Nigerian Oil and Gas Conference scheduled to hold next month.
On his part, 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 the insurance guidelines.
He expressed optimism that the partnership would realise the benefits of increased local content, in-country value retention, job creation, employment generation, and gross domestic product growth.
Thomas also pledged NAICOM’s commitment to creating an enabling environment that would consistently enhance increased capacity of the insurance institutions financially and technically.
