The National Insurance Commission (NAICOM) and Nigerian Content Development and Monitoring Board (NCDMB) have jointly issued Insurance Guideline to ensure strict compliance and enforcement of the Nigerian Oil and Gas Industry Content Development, NOGICD Act to promote local content.
Sunday Thomas, Commissioner for Insurance, said the Guideline would assist the NOGICD monitor utilization of in-country insurance capacity.
Speaking Wednesday at the official signing and presentation of the document on submission of insurance programmes, held in Yenagoa Bayelsa, he outlined Operators, Project Promoters, Alliance Partners, and Nigerian Indigenous Companies in the Nigerian Oil and Gas Industry as beneficiaries.
“The joint guidelines which are today issued with the objectives of enforcing and strengthening compliance with the provisions of the referenced sections of the NOGICD Act and relevant provisions of the Insurance Act concerning companies carrying on insurance business in the Nigerian oil and gas industry is to also enable the board monitor utilization of in-country insurance capacity,” he said.
According to Thomas, the partnership between NAICOM and the NCDMB which has led to this jointly issued document is a drive towards strengthening our mutual oversight functions.
“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. It is in alignment with this national interest that we converge on this day to append our signatures to the instrument that solicits information evidencing adherence to the Government’s local content determination.
He stated that, before the NOGICD Act 2010, the Insurance Act 2003 made far-reaching provisions for the domestication and domiciliation of insurance services in Nigeria. In particular, 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.
“In addition, 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 National Insurance Commission; This amongst others led to the proactive considerations of the specific provisions of the NOGICD Act relating to the Insurance Industry.
“The Guidelines for Oil & Gas Insurance Business was issued in 2010 which amongst others, stipulates the roles and responsibilities of insurance institutions in ensuring compliance with local content law. This was done with the primary consideration of ensuring that available In-Country Insurance Capacity is filled before any foreign consideration.
Thomas added that the overall aim of the guideline is the development of indigenous content through increased indigenous participation. The NOGICD Act 2010 was therefore applauded by the entire insurance industry as it greatly complemented the National Insurance CCommission’sroles and responsibilities in performing its regulatory and supervisory oversight function.
“In a similar vein, Sections 49 and 50 of the NOGICD Act specifically relate to Insurance & Reinsurance and Approval for Offshore Insurance respectively. The Act also contains a Schedule with recommended minimum levels of Nigerian Content Level measured by percentage spend.
“The historical synergy between our agencies has therefore necessitated a veritable platform for inter-agency collaboration to give effect to the requirements of Section 49 and 50 of the NOGICD Act 2010 by guiding Operators in the Oil and Gas necessary for satisfying the provisions of the law about insurance transactions.
“The joint Guidelines which are today issued with the objectives of enforcing and strengthening compliance with the provisions of the referenced sections of the NOGICD Act and relevant provisions of the Insurance Act concerning companies carrying on insurance business in the Nigerian oil and gas industry is to also enable the Board monitor utilization of in-country insurance capacity.
He urged all operators, project promoters, alliance partners and Nigerian indigenous companies engaged in any form of business, operations or contract in the Nigerian oil and gas industry to note that the sighted relevant laws have demanded our adherence and continued compliance, hence the issuance of this Guidelines.
“It is on this note that I express optimism about the realization of the benefits of increased local content which are but are not limited to; increased retention, and growth in an in-country technical capacity. Job creation and employment generation, increased penetration and GDP growth, human capacity development, and many others.
Whilst we note the need to secure domestic supply chains through strong backward domestic integration which has the potency of protecting economies from imported contagion of both a health and economic variety, we are also mindful of the capacity gap of the Supply-side.
He further stated that the National Insurance Commission is committed to creating an enabling environment that will consistently enhance the increased capacity of the Insurance Institutions both financially and technically.
On his part, The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Kesiye Wabote, said with the launch of the Insurance Guideline, the agency is on course to achieving 70 per cent local content by 2027.
According to him, the NCDMB/NAICOM Insurance guideline is the first step by the board in attaining the 70 per cent local content goal.
He said, “this event is another step by the Board to attaining 70 per cent Nigerian Content under the Board’s 10-Year Strategic Roadmap.”
“I am glad to announce that today’s launch of the Insurance Guidelines marks the first step in the implementation of the Guidelines. This is following the series of meetings over the past one week between representatives of the Board and NAICOM to draft the framework implementation plan, which has now been concluded.
Let me conclude by reminding us that this event is another step by the Board to attaining 70% Nigerian Content by 2027 under the Board’s 10-Year Strategic Roadmap.
“Finally, the Board is delighted to 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. We will further dissipate information about the new Insurance Guidelines during the Nigerian Content Seminar session at the 2022 Nigerian Oil and Gas Event scheduled for next month, 4th to 7th July 2022 in Abuja. I look forward to seeing you at the event as we deepen the discussions on the requirements and benefits of the Insurance Guideline to industry practitioners.”