Joint Guideline Underway for Insurance and Oil and Gas Sectors
By Patience Ikpeme
Plans are underway to come up with a joint guideline that will promote local content harmonization in transactions within the insurance and oil and gas sectors.
Mr Olorundare Sunday Thomas, the Commissioner for Insurance/Chief Executive of the National Insurance Commission (NAICOM), disclosed this development during the Oriental News Summit in Abuja on Thursday,
He highlighted that the issuance of these joint guidelines will enable the Nigerian Content Development and Monitoring Board (NCDMB) to effectively monitor the utilization of inter-country insurance capacity.
This, in turn, will lead to various benefits such as increased retention, growth in inter-country technical capacity, job creation, enhanced penetration, GDP growth, and improved regulatory oversight.
Mr Thomas also stressed the importance of these guidelines in accurately pricing risks and seeking professional advice when insuring entities, particularly within the oil and gas sector.
By avoiding negligent omissions of necessary insurance coverage, financial pressure and burdens can be minimized. Additionally, these guidelines will incentivize regulators to thoroughly review a company’s exposure, and proper profiling of insurance coverages will foster collaboration and knowledge sharing between the insurance and oil and gas industries.
He further emphasized that the disclosure and reporting requirements of the Nigerian Oil and Gas Industry Content Development Act of 2010 (NOGICD ACT) will enhance regulatory decisions that benefit both the oil and gas sector and the nation as a whole.
Mr Thomas highlighted the significance of implementing preventative, detective, corrective, and compensatory regulatory controls to strengthen the synergy between these two sectors.
This he said aligns with the government’s long-term plan to develop Nigerian industries and human capital through increased indigenous participation that enhances local content.
Before the implementation of the NOGICD ACT, Mr Thomas noted that the Insurance Act of 2003 already laid the groundwork for domesticating and domiciling insurance services in Nigeria.
The current drive to intensify these efforts aims to bridge the demand-supply gap and encourage the development of specialized insurance products tailored to the needs of the oil and gas sector.
While the oil and gas sector has been a catalyst and significant contributor to Nigeria’s GDP, previous federal government administrations have also initiated diversification efforts.
In line with this, NAICOM strives to promote innovative insurance solutions and consistently enhance the financial and technical capacity of insurance institutions.
