By Henry Uche, mercy4henryuc@gmail. com,
The National Insurance Commission (NAICOM) and the Nigerian Content Development & Monitoring Board (NCDMB) has launched insurance Guidelines on the submission of Insurance Programme by Operators, Project Promoters, Alliance Partners, and Nigerian Indigenous Companies, to address the loopholes in the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, 2010.
Speaking recently at the official launch, the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote, said the Guidelines was designed for the actualization of the Board’s mandate under the NOGICD Act, 2010, which was primarily to drive and promote Nigerian Content in the Nigerian Oil and Gas industry.
According to him, the Insurance Guideline addresses loopholes that have been identified by the Board in implementing the provisions of the NOGICD Act, particularly sections 49 and 50.
“As we are aware, the combined provisions of sections 49 and 50 require all operators engaged in any form of activity or 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.
“The NOGICD Act provides that where an operator seeks to place an insurable risk offshore, a written approval of NAICOM must first be sought and obtained and that NAICOM, prior to the issuance of the approval, must first determine that ‘’…local capacity has been fully exhausted.”
NCDMB’s boss stressed that the effort was a culmination of consistent, persistent and rigorous engagement between the Board and NAICOM in the last twelve months, noting that the local content enforcement and implementation is not a sprint but a marathon.
“The essence of the above provisions of the NOGICD Act was to ensure the full utilisation of available in-country capacity in the Insurance sector before seeking offshore insurance services. This is expected to support retention of capital in-country and build capacity of Nigerian insurance companies in the oil and gas industry.
Wabote maintained that the implementation of the Insurance Guidelines would further strengthen the Board’s local content drive and ensure that a greater portion of the spend in the Insurance industry as it relates to oil and gas activities in Nigeria is retained in-country.
“This Insurance Guidelines drawn up by the Board and NAICOM, will lead to more value addition and usage of Nigerian insurance firms and insurance brokers registered in Nigeria. It’s another step by the Board to attaining 70 percent Nigerian Content by 2027 under the Board’s 10-Year Strategic Roadmap.”
He added that the Board would collaborate further with NAICOM to 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.
Similarly, the Commissioner for Insurance, Thomas Sunday, speaking at the same event, assured that the Commission was committed to creating an enabling environment that will consistently enhance increased capacity of the insurance institutions both financially and technically.
“The Federal Government’s drive towards enhancing local content speaks to the long-term plan burn out of good intention and strategy to grow our economy, develop the Nigerian Industries and her human capital, thus we shall provide the enabling environment.”
The Commissioner reaffirmed that the overall aim of the guideline was the development of indigenous content through increased indigenous participation, saying, “It is important to state that, prior to the NOGICD Act 2010, the Insurance Act 2003 made far reaching provisions for the domestication and domiciliation of insurance services in Nigeria.
“Section 65 (7) of the Insurance Act 2003 made it compulsory for any property located in Nigeria whether moveable or immovable to be insured by a Nigerian registered insurer. Section 67 requires that insurance of all imports into Nigeria must be insured by insurers registered in Nigeria.
“More so, Section 72 prohibits any person from transacting insurance or reinsurance with foreign insurers/reinsurers except with the written permission of the Commission.
“Following the peculiarity of the Oil and Gas industry, the NOGICD Act was enacted which therefore facilitated the hitherto collaboration between the NCDMB and NAICOM. This amongst others, led to the proactive considerations of the specific provisions of the NOGICD Act relating to the Insurance Industry.”
He maintained that the Guidelines for Oil & Gas Insurance Business issued in 2010 which amongst other Provisions, stipulates the roles and responsibilities of insurance institutions in ensuring compliance with local content law. According to him, this was done with the primary consideration of ensuring that available ‘In-Country Insurance Capacity’ was fully filled.