Subsidy Removal: Oil & Gas Sector Will No Longer Face Risks Associated With Product Pricing— NAICOM

The National Insurance Commission (NAICOM) has said that the oil and gas sector will no longer be associated with the risk of overpricing of products, affecting Nigerians.

The Commissioner for Insurance and Chief Executive of the National Insurance Commission, Sunday Thomas said this during his keynote address at the oriental news summit on building local content on Thursday.

Thomas said the drive towards enhancing local content speaks to the long-term plan of the government to develop Nigerian Industries and her human capital.

He said,” The intention of synergy is more tilted towards encouraging preventive, detective; as well as corrective and compensatory regulatory controls.

“It is beneficial, to also state, that necessity is on us to ensure that risks are accurately priced and professional advice is given to ensuring entities, especially in the Oil and Gas space, as it poses a vantage position to avoiding overpricing of products, underrating of risks, negligent omission of necessary covers and its consequential effect on avoidable pressure and burden on finances.

“However, the company’s exposures that were not accurately reviewed could deter incentivization from the regulator that could be provided in the future to compensate for risk improvements deployed to reduce potential environmental liabilities, or the advantages enjoyable by deploying capital on the transition from high-based carbon energy and its environmental impacts.

“This is in contemplation with the pressure to reduce Green-House Gas (GHG) emissions and transition to Clean and Renewable Energy.

“Also, the disclosure and reporting requirement of Section 49 of the Nigeria Oil and Gas Industry Content Development (NOGICD) Act is to ultimately enhance regulatory decisions that will benefit the Oil and Gas Industry and the nation at large.”

Before NOGICD ACT, Thomas revealed that the Insurance Act 2003 has made a far-reaching provision for the domestication and domiciliation of insurance services in Nigeria.

He said, “Section 65(7) has made it compulsory for any property located in Nigeria whether moveable or immovable to be insured with a Nigerian registered insurer. Section 67 also requires that insurance of all imports into Nigeria must be insured by insurers registered in Nigeria.”

He further noted that a platform that will enhance the pace of the regulators’ oversight on the appropriateness of products offered to the market and the various association of the company’s operations will be obtained.

Thomas said, “The commission has shown a positive attitude to market development by releasing the Soundbox Guidelines, an instrument to test ingenuities in the market. Hence, the Commission seeks to facilitate and promote innovative insurance solutions that will address the gaps in current insurance offerings.

“Furthermore, there is the urge to intensify the ongoing drive to facilitate platforms that address the demand-supply gap; encourage specialized products that address the needs of the oil and gas industry; address all potential regulatory impediments; support the development of human capacity, and ensure technical capacities of Insurance suppliers; ensure adequate risk pricing and comprehensive coverages and risk management.”