New regulations to prompt oil & gas companies to patronise local insurance firms

Adebayo Obajemu

Nigerian Content Development and Monitoring Board (NCDMB) and National Insurance Commission (NAICOM) have signed joint insurance regulations

The new NAICOM, NCDMB Guidelines are expected to develop local insurance activities in oil and gas sector.

The agreement has removed difficulties in the way of underwriting oil and gas assets by indigenous insurance firms in Nigeria .

The guidelines seek to block the 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.

The Executive Secretary, NCDMB, Simbi Wabote, and the Commissioner for Insurance, Sunday Thomas, signed the guidelines recently on behalf of their organisations in Yenagoa, Bayelsa.

In Wabote words, the provisions of sections 49 and 50 of the NOGICD Act r demand of all operators who are in any form of activity or project in the oil and gas industry to ensure all insurable risks related to its oil and gas business are domiciled with an insurance company, through a broker registered in Nigeria.

He stressed that the Act provides that where an operator seeks to place an insurable risk offshore, written approval of NAICOM must first be sought and obtained and that the commission, before 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 spending in the Insurance industry as it relates to oil and gas activities in Nigeria is retained.

He explained: “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 to capture significant financial spend under oil and gas insurance services in the country.”

The NCDMB boss added that the collaboration between the 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 per cent Nigerian Content by 2027 under the Board’s 10-Year Strategic Roadmap.