NCDMB, NAICOM Seal New Insurance Pact for Oil and Gas Industry
Nigerian Content Development and Monitoring Board (NCDMB) and the National Insurance Commission (NAICOM) have signed joint guidelines that will compel oil and gas companies operating in Nigeria to patronize local insurance companies.
While falling in line with the local content objectives and establishment letters of the NCDMB, the new insurance guidelines would support the retention of insurance business in the domestic circuit in Nigeria.
Although finer details of the guidelines are expected at the Nigerian Content Seminar of the 2022 Nigerian Oil and Gas Conference scheduled for July 2022, executive secretary of the NCDMB, Mr. Simbi Wabote, said the new guidelines are addressing loopholes identified 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.
Speaking during the signing ceremony in Yenegoa, Bayelsa state, Wabote explained that the provisions of sections 49 and 50 of the NOGICD Act require all operators engaged 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.
The NCDMB boss explained further 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.
In his words: “The insurance guideline 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 both government agencies are committed to ensuring that the implementation of the insurance guidelines are successful and leads 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.
Speaking at the signing ceremony, the commissioner for insurance, NAICOM, Sunday Thomas, charged stakeholders in both the insurance and oil and gas sectors, who are connected to contract insurance, sec industry engaged in any form of business, to ensure compliance with the relevant laws and compliance with the new guidelines.