By Rosemary Onuoha
As renewal of major insurance covers for the next financial year continues, Vanguard investigations have revealed that most of the oil majors in the country no longer want to give their oil and gas risks to companies with capital base below N9 billion.
Vanguard findings show that in spite of the cancellation of the Tier Based Minimum Solvency Capital (TBMSC), many insurance companies will lose the oil and gas businesses they held before the controversial TBMSC policy.
Managing Director of Consolidated Hallmark Insurance Plc, Mr. Eddie Efekoha, who disclosed this, noted that a broker recently informed him that a client demanded that his business should not be given to any underwriting firm with less than N9 billion capital base as proposed in the cancelled TBMSC policy.
Efekoha said, “Many of our oil and gas clients no longer want to place their risks with companies with capital base below N9 billion. Of course we are all here in this market, there is a particular transaction in Exxon Mobil for several years that never respected the N3 billion capitalization and to that extent some of us whose capital were not up to that minimum were excluded.
“With such developments, it is now immaterial whether the industry regulator withdraws the TBMSC policy or not because the policy has opened the eyes of insurance consumers.
“Of course it is equally public knowledge that even Dangote Group, for several years did not select underwriters based on the authorized capitalisation by NAICOM. So for clients to begin to agitate, it means that NAICOM and all of us have stirred up the appetite of the consumer. So things have to change.”
Efekoha said that the initiative was a wakeup call for operators to do certain things, adding, “Thanks to NAICOM because sometimes we ignore some certain things that we should do and focus on less important things. The issue of TBMSC has brought about a reawakening in some of us who were already sleeping at that time; that we must do something in order to help our situation,” he said.