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NAICOM, NNPC may release guidelines for insurance of oil, gas business

Posted by By Joshua Nse on 2006/06/19 | Views: 459 |

NAICOM, NNPC may release guidelines for insurance of oil, gas business


GUIDELINES for the implementation of the 10 per cent local content policy of the Federal Government for the insurance of oil and gas business by local underwriting companies is to be released before the end of this month.

GUIDELINES for the implementation of the 10 per cent local content policy of the Federal Government for the insurance of oil and gas business by local underwriting companies is to be released before the end of this month.

The guidelines, which is jointly put together between the Nigerian National Petroleum Corporation (NNPC) in collaboration with the National Insurance Commission (NAICOM) is designed to monitor full implementation and compliance with the government policy on insurance in the oil sector.

Sources at the commission who confirmed to The Guardian that the guidelines is ready said: "The guidelines for the implementation of the Federal Government 10 per cent local contents policy for the insurance of oil and gas business for local underwriting companies would be released before the end of this month. The limitations of insurance patronage in the past for lack of capacity especially in the insurance of oil and gas will be substantially reduced after the recapitalisation and consolidation exercise. The consolidation exercise will definitely bring this under control and enhance an accelerated growth of the industry".

He thanked the Group Managing Director and Chief Executive Officer NNPC, Dr. Funso Kupolokun for his support for the insurance industry and his nurturing efforts to see to the implementation of the local contents policy for the industry.

The NNPC boss had however, said recently that the local underwriting companies would need about $250 million (N32.5 billion) to insure risks in the oil and gas industry.

Kupolokun said that to ensure stringent joint guidelines, the NNPC has concluded plans to collaborate with NAICOM on how to monitor full implementation of the 10 per cent local content policy for the insurance industry.

According to him: "The modalities that will be rolled out is aimed at promoting local insurance companies to attain full capacity of major Llyods energy syndicate by developing appropriate co-insurance arrangements in the sector".

The Commissioner for Insurance and CEO, National Insurance Commission, Chief Okechukwu Chukwulozie who confirmed the plan said: "We have strategised substantially to boost local capacity particularly in the oil and gas sector, special risks insurance business and most importantly our human capital".

According to the NAICOM boss, "Besides the capital flight associated with offshore placement of reinsurance business and direct businesses of some multinationals have been a matter of great concern to the National Insurance Commission and the Federal Government and as such were determined to ensure the shortcomings were adequately addressed".

Said he: "A well capitalised insurance industry will not only attend to this matter in its entirety, but also enable the industry in the short run absorb its share of the 10 per cent local content policy of the federal government".

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.