The National Insurance Commission (NAICOM), says it has intensified its ongoing drive to facilitate platforms that address the demand-supply gap in the oil and gas Industry.
Mr Sunday Thomas, Commissioner For Insurance, NAICOM, said this while delivering a keynote address at the 2023 Oriental News Summit on Thursday in Lagos.
The theme of the summit is: “Building Local Content Synergy between the Oil and Gas, and Insurance Sectors in Nigeria”.
Thomas, also the Chief Executive Officer of the commission, said that the platform would encourage specialized insurance products that meet the needs of the industry.
Thomas said the commission was poised to address all potential regulatory impediments, support the development of human capacity and ensure technical capacities of insurance suppliers in the industry.
Others, he said include adequate risk pricing, comprehensive coverages and risk management.
“As a regulator, we are committed to creating an enabling environment that will consistently enhance increased capacity of the insurance institutions, both financially and technically.
“Beyond our promises and without pre-empting the paper presenters and discussants, I will express the need for reciprocal expectations from the operators in the oil and gas sector.
“One of which is timely compliance with the requirements of the guidelines, jointly issued by the commission and the Nigerian Content Development and Monitoring Board (NCDMB).
According to him, the drive toward enhancing local content speaks to the long-term plan of the government, burn out of good intention and strategy to grow its economy, develop the Nigerian industries and human capital.
Thomas explained that prior to the Nigeria Oil and Gas Industry Content Development Act of 2010 (NOGICD ACT), the Insurance Act 2003 made provisions for the domestication and domiciliation of insurance services in Nigeria.
He said that this is stated, in Section 65(7), which made it compulsory for any property located in Nigeria, whether moveable or immovable to be insured with a Nigerian registered insurer.
The commissioner said Section 67 requires that insurance of all imports into Nigeria must be insured by registered insurers.
Thomas stated that the historical relationship between both the oil and gas, and insurance industries could be traced to the birth of the latter, following the issuance of the NOGICD ACT.
He expressed that the insurance industry, in collaboration with the NCDMB, brainstormed and came up with the issuance of the Guidelines for oil and gas insurance business issued in 2010.
According to him, the guideline, among others, stipulates the roles and responsibilities of insurance institutions in ensuring compliance with local content law.
He, however, said that was with the primary consideration of ensuring actual exhaustion of available In-Country Insurance Capacity.
Thomas said the overall aim of the guideline is the development of indigenous content through increased local participation.
“The synergy between both industries was renewed when both agencies identified the need for a veritable platform for inter-agency collaboration.
“This is in order to give effect to the requirements of Sections 49 and 50 of the NOGICD Act 2010 by providing guidance to operators in the oil and gas, necessary for satisfying the provisions of the law in relation to insurance transactions.
“The journey for the renewed collaboration transited to the signing and unveiling of the guidelines on submission of insurance program by operators, project promoters, Alliance partners, and indigenous companies in the Nigerian oil and gas industry,” he said.
According to him, NAICOM has shown a positive attitude to market development by the release of the Soundbox Guidelines which is an instrument to test ingenuities in the market.
Thomas said, the commission sought to facilitate and promote innovative insurance solutions that would address the gaps in current insurance offerings.
The NAICOM boss stated that following the mandate to develop indigenous capacities to participate in the oil and gas industry, both regulators would collaboration to facilitate and promote adequate assessment of the needs of the oil and gas industry.
He noted that both regulators must also be able to influence the behavior of Insurers, Reinsurers and Brokers in manners that address the needs for national growth and development.
