The Nigerian Content Development and Monitoring Board (NCDMB) and the National Insurance Commission (NAICOM) have moved to ensure the patronage of the indigenous insurance companies by the oil and gas industry with the presentation of insurance services guidelines to stakeholders in the sector.
The patronage of the local insurance sector by the oil and gas industry is expected to help retain the funds that could have been spent in foreign countries in the Nigerian economy.
The guidelines were presented on Monday by the Executive Secretary of NCDMB, Simbi Wabote, and Commissioner of NAICOM, Mr. Sunday Thomas, at the 2022 Nigerian Oil and Gas Conference (NOG) in Abuja.
The guidelines will also address loopholes that have been identified while implementing the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
What they are saying
NCDMB says all insurable risks should go through a Nigerian registered insurance broker. The NCDMB boss also says that the provisions of sections 49 and 50 of the NOGICD Act require all operators engaged in any form of activity in the sector to insure all insurable risks related to their business with an insurance company, through an insurance broker registered in Nigeria.
Wabote said, “The insurance guidelines was developed by the two regulatory bodies 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 noted that 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, adding that NAICOM before the issuance of the approval must ascertain that local capacity had been fully exhausted.
Wabote reiterated that the guidelines would 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 was retained in-country.
Speaking at the occasion, 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 compliance with insurance guidelines.
What you should know
- The NCDMB has been at the forefront of the increase of local participation in the oil and gas industry with the growth cutting across several sectors.
- The NCDMB says it has grown Nigerian content in the oil and gas sector from 5% local content before the enactment of the NOGICD Act 2010 to 42%, with the agency noting that Nigerians and some local firms reversing dominance by foreign companies