NCDMB, NAICOM sign insurance service guidelines for local oil producers

The Nigerian Content Development and Monitoring Board (NCDMB) and the National Insurance Commission (NAICOM) have signed insurance services guidelines that would “oblige” the oil and gas industry to patronise the local insurance sector.

A statement issued on Monday by NCDMB’s corporate communications department said the guidelines would help retain insurance spending by oil and gas operators in the economy.

According to the statement, Simbi Wabote, executive secretary, NCDMB, and Sunday Thomas, commissioner for insurance, NAICOM, 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 deal with insurance of oil and gas activities.

In his remarks, Wabote said 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 related to its oil and gas 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 NAICOM must also ascertain that local capacity has been fully exhausted before the issuance of the approval. 

“The insurance guidelines being launched today was developed by the two regulatory bodies,” the statement quoted Wabote as saying. 

“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 the country.”

He 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 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 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.