Appraisal Of The Role Of Regulatory Bodies In The Nigerian Insurance Industry

Appraisal Of The Role Of Regulatory Bodies In The Nigerian Insurance Industry

Abstract

Business is too important to be left to “ Business- men ” to run and operate as they see fit. Moreso, if that “ business ” is that of insurance. The average Nigerian might not know important about insurance but he or she knows that insurance companies “ do n’t pay claims ”

In otherwords, the insurance assiduity has a bad image. This was the reason behind the civil governments creation of different insurance nonsupervisory bodies. To help “ quacks from doing insurance business and to cover the assuring public, insurance laws and nonsupervisory bodies have been created to further cover the assuring public.

The question now is, who are these nonsupervisory bodies? How do they operate and how effective are they in performing their duties? This design in addition to “ setting ” these nonsupervisory bodies, will trace the birth of regulating insurance business and eventually, make recommendations on how the nonsupervisory bodies can do better.

Chapter One

Preface

Background Of Study

The business of insurance is grounded on the conception of spreading a threat, so that “ it lies fluently upon the numerous than heavily upon the many. Insurance is a pool of finances into which benefactions are made and from which those who suffer loss are compensated.

As a contract, the ensured and the insurer must be honest in all their dealings with each other. On the part of the insurer, he must be suitable, financially to settle all licit claims made on him as and when due. In the history, nearly anyone, with or without experience and acceptable capital could enjoy an insurance company. As a result, utmost licit claims weren’t paid. This sad state of affairs was due largely to the “ freedom ” or rather, the absence of acceptable Government supervision.

In other to stop this exploitation, the Government set up the “J.C. Obande ” commission in 1961. Their report led to the 1961 insurance companies act, further rulings and acts followed leading to the present insurance Act of 2003.

In addition, from 1961 to date, the following nonsupervisory bodies supervise the insurance assiduity they include; the Central Bank of Nigeria(C.B.N), the National Deposit Insurance Commission(N.D.I.C), the Securities & Exchange Commission( SEC) and eventually the National Insurance Commission( NAICOM) which plays a more direct part in the supervision of insurers. Each of these bodies performs functions aimed at regulating the insurance assiduity. An assessment of their performance will be made.

STATEMENT OF PROBLEM

For the pragmatist, the value of an idea(e.g. supervision of insurance) lies in its practical results. So, the questions is, how far and how well have the controllers performed?

. Why is it necessary to regulate or supervise the insurance assiduity?

2. How are insurers supervised?

3. How effective is the supervision?

4. Can supervision be made better?

Ideal Of Study

This exploration work has the following objects

1. To trace as far as possible, the origin of insurance

. To show the time and system of the preface of insurance into Nigeria.

3. The history and system of insurance supervision in Nigeria.

4. The donation of nonsupervisory bodies to the insurance assiduity.

5. To estimate their performance and determine if they’ve done well so far.

6. Eventually, to suggest how they can ameliorate.

Significance Of The Study

This design is intended to serve a number of purposes and all trouble has been made to insure that it has been written to meet these purposes.

1. This design will punctuate the administrative bodies and educate on their functions and mode of operation.

2. To suggest ways of perfecting their effectiveness.

3. Every exploration should announcement to the volume of knowledge formerly accumulated. This design isn’t as exception.

Exploration Suppositions

The following thesis were formed to achieve the objects of the exploration.

1. Ho- The nonsupervisory authorities are unfit to carry out their places and functions in the Nigerian insurance assiduity.

H1- The nonsupervisory authorities are suitable to carry out their places and function in the Nigeria insurance assiduity.

2. Ho- The nonsupervisory authorities didn’t contribute mainly to the force development in the insurance assiduity.

H1- The nonsupervisory authorities have contributed to the force development in the insurance assiduity.

3. Ho – The nonsupervisory authorities didn’t make the asked impact on the Nigeria Insurance Industry.

H1 – The conditioning of the nonsupervisory authorities have made the asked impact on the Nigeria Insurance Industry.

4. Ho – The conditioning of the nonsupervisory authorities won’t have unborn prospects in the Nigerian Insurance Assiduity.

H1 – The conditioning of the nonsupervisory authorities won’t have unborn prospects in the Nigerian Insurance Assiduity.

Compass And Limitation

This design covers the nonsupervisory bodies of the Nigerian Insurance Assiduity who they are, their functions, places and their performance. The limiting factors endured by the experimenter are; difficulty in carrying applicable material, plutocrat wasn’t enough to conduct a thorough exploration and eventually, the experimenter didn’t have enough time to do a thorough job.

Description Of Terms

1.C.B.N The Central Bank of Nigeria is the apex fiscal institution which is charged with the responsibility of managing the cost, volume, vacuity and direction of plutocrat and credit in an frugality with a view to achieving some asked profitable objects. It also regulates the bank andnon-bank fiscal institutions.

2. Insurance An arrangement with a company in which you pay plutocrat each time and they pay the costs if anything bad happens to you, similar as illness or accident.

3. Insurer This is a commercial reality registered under the companies and confederated matters decree 1990 to vend insurance cover.

4. Insurance Market This is an institutionalized arrangement for bringing together people who have the need transfer their pitfalls and those willing to assure similar pitfalls subject to certain terms and condition.

5. Indemnity This is got from the Latin word “ indimidim ” and it means to put the ensured “ back ” in the condition he was before he suffered a loss i.e. reprisal means to compensate.

6. Contract An agreement between two or further parties which is binding at lawe.g. insurance.

7. interposers These are the agents who act as facilitators in arranging insurance contractual relationship between the ensured and the insurers. They’re awarded by payment of commission.

8. NAICOM National Insurance Commission which was established by military decree on January 10, 1997 to insure the effective administration, supervision, regulation and control of insurance business in Nigeria.

9. NIA The Nigeria Insurers Association is a trade association of registered insurance companies in Nigeria.

10. Policy This is a document which is the substantiation of the contract between the ensured and the insurer.

11. Premium This is the fiscal consideration the policyholder gives to the insurer in exchange for the compensation he receives when he( the insured) suffers a loss.

12. threat This is the possibility of a loss being.

13. Reserve A proportion of profit which is set aside for extremities by a business.

14. permission This is a form of discipline that can be used if someone breaches a rule of law guiding his or her conduct.

15. financing The process of assessing a threat proposed for insurance and fixing proper decoration rates by an expert known as an coach.