The Nigerian Content Development and Monitoring Board (NCDMB) and the National Insurance Commission (NAICOM) have signed insurance services guidelines which would oblige the oil and gas industry to patronise the local insurance sector.
A statement issued on Monday by the NCDMB’s Corporate Communications Department, said the guidelines would help to retain insurance spending by operators in the economy.
The statement said the Executive Secretary, NCDMB, Mr Simbi Wabote and the Commissioner for Insurance, Mr Sunday Thomas, signed the guidelines recently on behalf of their organisations in Bayelsa.
It said the guidelines would address loopholes that had 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 statement quoted Wabote as saying that the sections required all operators engaged in any project in the oil and gas industry to insure all insurable risks related to their business 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.
Wabote added that that NAICOM before the issuance of the approval must also ascertain that local capacity has been fully exhausted.
He maintained that the Insurance guidelines would strengthen the board’s local content drive.
He said it would ensure that a greater portion of the spend in the Insurance industry as it relates to oil and gas activities in Nigeria was retained in-country.
Wabote said: “The insurance guidelines being launched today was developed by the two regulatory bodies.
“It is 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 said the collaboration between NCDMB and NAICOM would further ensure the successful implementation of the Insurance guidelines and every other activity.
According to him, this 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 would be released at the Nigerian Content Seminar at the 2022 Nigerian Oil and Gas Conference scheduled for July 2022.
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 between the board and NAICOM would realise the benefits of increased local content, in-country value retention, job creation, employment generation and Gross Domestic Product growth.
Thomas also reiterated the agency’s commitment to create an enabling environment that would consistently enhance increased capacity of the insurance institutions both financially and technically.