Ifeanyi Ugwuadu
30 November 2009
Year end signals from the insurance sub-sector indicate that the Nigerian insurance market will key into a government-backed growth initiative in the energy sector to expand participation in the energy sector and grow premium income.
A growth strategy unveiled by the industry regulator in its Market Development and Restructuring Initiative identified Nigerian Content Policy as one of the key pillars that will drive growth in the next three years. Others include the Pension Reforms which makes it mandatory for all employees of labour to buy group life insurance for its employees as well as opening up annuity business for insurers.
To further underline the seriousness of the plan the Commission issued a guideline to both underwriters and intermediaries to adhere strictly to the restrictions on offshore insurance contained in Insurance Act 2003.
In section 16(2) of the 2009 Insurance Policy Guidelines for intermediaries, the Commission warns, "all insurable risks associated with oil and gas business including prospecting, exploration, drilling, construction, shipping, distribution, marketing, transportation, etc, shall be placed 100% through an insurer in the Nigerian insurance industry duly registered under the Insurance Act 2003."
Further in the guideline, the process and procedure for offshore placement is stated thus, "the insurer would place part of the risks first with each and other domestic insurers and reinsurers to their maximum capacities before placing the balance in the international market through an internationally established reinsurance arrangement."
However, the foregoing is subject to getting approval from the National Insurance Commission. A penalty five times the total premium involved in the transaction is payable upon default.
Underwriters' trade group, Nigerian Insurers Association is also building on this plan to market the industry to multinational oil corporations in the country. At a recent briefing for the press, chairman of the association,
Mr Wole Oshin also underscored the importance of the local content policy in growing the industry capacity.
Oshin disclosed that a pooling arrangement has received the approval of the Nigerian Content Division.
Be the first to Write a Comment!
Copyright © 2009 Vanguard. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
