The Nigeria Civil Aviation Authority (NCAA) and the National Insurance Commission (NAICOM) have entered into a Memorandum of Understanding (MoU) aimed at strengthening aviation insurance oversight and enhancing financial protection for airlines, operators, passengers and other stakeholders in Nigeria’s aviation sector.

The agreement was signed on Wednesday at the NCAA headquarters in Abuja and includes plans to establish a Joint Technical Committee on Aviation Insurance to promote closer regulatory coordination between both agencies.

Speaking during the signing ceremony, the Director-General of the NCAA, Chris Najomo, said the partnership would reinforce aviation safety, financial resilience, regulatory compliance and protection for passengers and other industry stakeholders.

Najomo described the agreement as the formalisation of an existing working relationship between the two regulators. He noted that NAICOM had previously assisted the NCAA by assessing the adequacy and viability of insurance policies secured by aviation operators.

According to him, the new arrangement will expand cooperation between the regulators, increase confidence among stakeholders and help Nigerian aviation businesses operate more cost-effectively.

Najomo said aviation is globally recognised as one of the safest forms of transportation, but operators remain exposed to substantial operational risks capable of creating significant financial consequences when incidents occur.

He therefore stressed the importance of having a strong and verifiable insurance framework that complements aviation safety regulations while improving the financial resilience of businesses within the sector.

The NCAA and NAICOM have already collaborated on insurance requirements applicable to aviation operators under Part 18.14 of the Nigeria Civil Aviation Regulations 2023.

Najomo said the latest MoU would build on that collaboration by establishing a more balanced regulatory framework in which safety obligations and financial protection reinforce each other.

He added that the partnership would encourage sustainable insurance practices, minimise avoidable regulatory and operational difficulties and contribute to the long-term development of Nigeria’s aviation industry.

Also speaking at the event, the Director of Air Transport Regulation at the NCAA, Babaoye-Iriobe, described aviation insurance as an important component of the industry’s stability and sustainability.

She explained that suitable insurance arrangements are required to protect passengers, operators, third parties, cargo and other interests from liabilities associated with aviation operations.

Iriobe said effective supervision of aviation insurance depends on close cooperation between aviation and insurance regulators, as well as sufficient underwriting capacity, certainty in insurance contracts, suitable risk retention and compliance with regulatory requirements.

She disclosed that representatives of the two agencies had worked through the Joint Technical Committee on Aviation Insurance to develop the framework underpinning the MoU.

The committee is expected to facilitate regulatory cooperation, information sharing and verification of compliance with aviation insurance requirements, while helping to build a more resilient and sustainable aviation industry.

For Nigerian aviation businesses, especially operators exposed to significant operational and financial risks, improved insurance oversight is expected to offer greater certainty in compliance and risk management while supporting business continuity and long-term growth.

Source: msmeafricaonline