APPRAISAL OF THE ROLE OF REGULATORY BODIES IN THE NIGERIAN INSURANCE INDUSTRY
Abstract
Business is just too crucial to be left to “Business-men” to run and perform as they see fit. Moreso, if that “commercial enterprise” is that of coverage. The common Nigerian won’t realize an awful lot approximately coverage however she or he is aware of that coverage agencies “do not pay claims”
In otherwords, the coverage enterprise has a horrific image. This turned into the motive in the back of the federal governments advent of various coverage regulatory our bodies. To prevent “quacks from doing coverage commercial enterprise and to shield the insuring public, coverage legal guidelines and regulatory our bodies had been created to similarly shield the insuring public.
The query now is, who’re those regulatory our bodies? How do they perform and the way powerful are they in appearing their duties? This assignment further to “appraising” those regulatory our bodies, will hint the genesis of regulating coverage commercial enterprise and in the end, make tips on how the regulatory our bodies can do better.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF STUDY
The commercial enterprise of coverage is primarily based totally at the idea of spreading a risk, so that “it lies without problems upon the numerous than closely upon the few. Insurance is a pool of budget into which contributions are made and from which people who go through loss are compensated.
As a contract, the insured and the insurer need to be sincere in all their dealings with every different. On the a part of the insurer, he need to be able, financially to settle all valid claims made on him as and while due. In the past, nearly anyone, without or with enjoy and ok capital ought to personal an coverage company. As a result, maximum valid claims have been now no longer paid. This unhappy situation turned into due in large part to the “freedom” or rather, the absence of ok Government supervision.
In different to forestall this exploitation, the Government installation the “J.C. Obande” fee in 1961. Their document caused the 1961 coverage agencies act, greater decrees and acts accompanied main to the existing coverage Act of 2003.
In addition, from 1961 to date, the subsequent regulatory our bodies supervise the coverage enterprise 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 in the end the National Insurance Commission (NAICOM) which performs a greater direct function withinside the supervision of insurers. Each of those our bodies plays features aimed toward regulating the coverage enterprise. An evaluation in their overall performance might be made.
1.2 STATEMENT OF PROBLEM
For the pragmatist, the price of an idea (e.g. supervision of coverage) lies in its realistic results. So, the questions is, how some distance and the way properly have the regulators performed?
1. Why is it essential to alter or supervise the coverage enterprise?
2. How are insurers supervised?
three. How powerful is the supervision?
4. Can supervision be made better?
1.three OBJECTIVE OF STUDY
This studies paintings has the subsequent objectives:
1. To hint as some distance as possible, the foundation of coverage
2. To display the time and technique of the creation of coverage into Nigeria.
three. The records and technique of coverage supervision in Nigeria.
4. The contribution of regulatory our bodies to the coverage enterprise.
5. To appraise their overall performance and decide in the event that they have completed properly so some distance.
6. Finally, to indicate how they are able to improve.
1.four SIGNIFICANCE OF THE STUDY
This mission is supposed to serve some of functions and all attempt has been made to make certain that it’s been written to satisfy those functions.
1. This mission will spotlight the supervisory our bodies and train on their features and mode of operation.
2. To propose approaches of enhancing their effectiveness.
3. Every studies ought to advert to the extent of expertise already accumulated. This mission isn’t as exception.
1.five RESEARCH HYPOTHESES
The following speculation had been shaped to reap the targets of the studies.
1. Ho – The regulatory government are not able to perform their roles and features withinside the Nigerian coverage industry.
H1 – The regulatory government are capable of perform their roles and characteristic withinside the Nigeria coverage industry.
2. Ho – The regulatory government did now no longer make a contribution appreciably to the manpower improvement withinside the coverage industry.
H1 – The regulatory government have contributed to the manpower improvement withinside the coverage industry.
3. Ho – The regulatory government did now no longer make the preferred effect at the Nigeria Insurance Industry.
H1 – The sports of the regulatory government have made the preferred effect at the Nigeria Insurance Industry.
four. Ho – The sports of the regulatory government will now no longer have destiny potentialities withinside the Nigerian Insurance Industry.
H1 – The sports of the regulatory government will now no longer have destiny potentialities withinside the Nigerian Insurance Industry.
1.6 SCOPE AND LIMITATION
This mission covers the regulatory our bodies of the Nigerian Insurance Industry who they are, their features, roles and their performance. The proscribing elements skilled via way of means of the researcher are; issue in acquiring applicable material, cash turned into now no longer sufficient to behavior a radical studies and finally, the researcher did now no longer have sufficient time to do a radical job.
1.7 DEFINITION OF TERMS
1. C.B.N:
The Central Bank of Nigeria is the apex monetary group that is charged with the obligation of handling the cost, extent, availability and route of cash and credit score in an financial system so as to accomplishing a few preferred monetary targets. It additionally regulates the financial institution and non-financial institution monetary institutions.
2. Insurance:
An association with a agency in that you pay cash every yr and that they pay the prices if some thing awful occurs to you, consisting of contamination or accident.
3. Insurer:
This is a company entity registered beneathneath the agencies and allied topics decree 1990 to promote coverage cover.
four. Insurance Market:
This is an institutionalized association for bringing collectively human beings who’ve the want switch their dangers and people inclined to guarantee such dangers situation to sure phrases and circumstance.
five. Indemnity:
This is were given from the Latin word “indimidim” and it manner to position the insured “back” withinside the circumstance he turned into earlier than he suffered a loss i.e. indemnity manner to compensate.
6. Contract:
An settlement among or greater events that is binding at regulation e.g. coverage.
7. Intermediaries:
These are the sellers who act as facilitators in arranging coverage contractual courting among the insured and the insurers. They are offered via way of means of fee of commission.
8. NAICOM:
National Insurance Commission which turned into installed via way of means of navy decree on January 10, 1997 to make certain the powerful administration, supervision, law and manage of coverage enterprise in Nigeria.
9. NIA:
The Nigeria Insurers Association is a exchange affiliation of registered coverage agencies in Nigeria.
10. Policy:
This is a file that is the proof of the agreement among the insured and the insurer.
11. Premium:
This is the monetary attention the policyholder offers to the insurer in change for the repayment he gets while he (the insured) suffers a loss.
12. Risk:
This is the opportunity of a loss occurring.
13. Reserve:
A proportion
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