Local Underwriters To Get More Oil & Gas Insurance Businesses

The new Oil and Gas insurance services guidelines has opened up opportunities for indigenous insurers to get more insurance businesses from the oil and gas sector in a bid to further implement the local content Act.

To this end, a formal presentation of insurance services guidelines was made to the National Insurance Commission(NAICOM) in Abuja yesterday, thus, marking a new phase in decades of efforts by the insurance industry to deepen operations in the energy sector. The executive secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, who presented the guidelines to Commissioner for Insurance, Sunday Thomas, at opening of the Nigeria Oil And Gas Conference(NOG) in Abuja, reminded stakeholders of key policy direction of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.

Wabote noted that, the guidelines will oblige the oil and gas industry to patronise the local insurance sector, thereby, retain spend in the economy.
It will also address loopholes that have been identified while implementing the provisions of the NOGICD Act.

Wabote said, 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 its business with an insurance company, through an insurance broker registered in Nigeria.

He 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.”

According to him, 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.
He added 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 spend in the insurance industry as it relates to oil and gas activities in Nigeria was retained inountry.

Thomas, in reaction, 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 the insurance guidelines.

The Commissioner stressed the need for effective collaboration among operators to ensure seamless implementation of the Act.