Government Supervision And Control Of Insurance Industry In Nigeria Problems And Prospects

Government Supervision And Control Of Insurance Industry In Nigeria Problems And Prospects

Abstract

The end of this exploration work is to estimate the problems and prospects of government supervision and control of insurance assiduity in Nigeria ”. The specific objects of this exploration study include the following To examine the acceptability of government supervision and control of the insurance assiduity. To probe the extent to which commercial governance of the Nigerian insurance sector impacts on its supervision andcontrol.For a successful completion of this exploration work, the experimenter made use of both primary and secondary styles of data collection for information gathering. Primary data were collected through Questionnaire administration, Oral interview, and particular observation. Secondary data were collected through; diurnals and journals, Handbooks and lecture note books, and Internet. The data collected were presented in tables and anatomized with simple chance while the suppositions stated were tested with chi forecourt. The summary of findings made by the experimenter includes the followingThe deficit of trained/ good labor force is a factor behind non compliance with law governing the conduct of insurance business by some drivers in thesector.Based on the findings, A strong and competitive insurance assiduity is a compelling imperative for Nigeria’s profitable development and growth due to the fact that the country has a considerable high position of pastoral population, a good proportion of which are moreover illiterate or with veritably low- situations of introductory education. In recommendation, the controllers of the Nigerian insurance sector should borrow effective and effective programs that can duly thwart insurance conditioning in the country and insure that similar programs go in agreement with insurance principles in the country.

TABLE OF CONTENTS

Title runner——— i

blessing runner——– ii

fidelity——— iii

Acknowledgement——- iv

Abstract——— v

Table of Contents——– vi

CHAPTER ONE preface

Background of the study—– 1

Statement of the problem—– 5

objects of the study—– 6

exploration Questions—– 7

exploration suppositions—— 8

Significance of the Study—– 9

compass and Limitations of the Study– 10

description of terms——- 11

References——- 13

CHAPTER TWO REVIEW OF RELATED

LITERATURE

Overview of insurance—— 14

Origin of Nigerian insurance assiduity—- 20

The insurance sector and Nigerian frugality— 23

explanation for supervising and controlling insurance business

———- 26

History of public insurance commission( NAICOM)- 29

Supervision and control of the Nigerian insurance sector- 32

Commercial governance of the insurance sector– 40

rudiments of effective governance model in the insurance sector——— 45

Problems of insurance supervision and control in Nigeria-49

Prospects of insurance supervision and control in Nigeria-53

References——– 57

CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY

exploration design——- 58

Source of data——- 58

Population of the study—– 59

Determination of Sample size—- 60

Instrument of data collection—– 62

slice ways—— 62

Validity and trustability of the measuring instrument 63

system of data treatment and analysis– 64

References——– 65

CHAPTER FOUR DATA donation AND ANALYSIS

Data donation—– 66

Test of suppositions—— 83

Chapter Five

Summary Of Findings, Recommendations And

CONCLUSIONS

Summary of findings—– 93

Conclusions——– 95

Recommendations—— 96

Bibliography——- 98

Excursus——– 100

Chapter One

Preface

Background Of The Study

Insurance is a safe- guard against pitfalls. Any device aimed at reducing the chances of a threat being, when it happens, reducing the extent of its damage and furnishing the affected persons with compensation is a form of insurance. Insurance as a contract is between two parties where one party called the insurer undertakes to pay the other party called the ensured a fixed quantum of plutocrat in the circumstance of a specified ensured event.

Obasi( 2010) defines it as “ a contract between the person who buys insurance and an insurance company who vended the policy ”. He editorialized that “ by entering into the contract, the insurance company agrees to pay the policy holder or his family members a destined sum of plutocrat in case of any unfortunate event for a destined fixed sum outstanding which is in normal term called insurance decorations ”. The types of insurance products available in Nigeria include, motor insurance; general accident insurance; fire insurance; marine, aeronautics and conveyance insurance; life insurance; oil painting and gas insurance; health insurance; among others.

Insurance assiduity is generally seen as the backbone of any country’s frugality, since it ensures fiscal security, serves as an important element in the fiscal intermediation chain, and offers a ready source of long term capital for infrastructural systems.

Babalola( 2008) argues that the insurance assiduity “ mitigates the impacts of pitfalls and appreciatively correlates to growth as entrepreneurs cover their exposures, else threat- taking capacities are hampered ”.

Insurance also promotes the growth of businesses both small and large as it provides stability by allowing them operate effectively as they’re secured in knowing they’ve fiscal security should their business hassle loss. Insurance is also veritably important to the fiscal system. In collecting fairly small quantum called decoration from the ensured in the frugality, insurers are suitable to pull together a large pool of finances that could be invested for short and long term ages( Obasi, 2010). similar long- term backing of the frugality is veritably critical for profitable growth, and in heightening and broadening of the domestic fiscal system.

therefore, a strong and competitive insurance assiduity is a compelling imperative for Nigeria’s profitable development and growth due to the fact that the country has a considerable high position of pastoral population, a good proportion of which are moreover illiterate or with veritably low- situations of introductory education. Times of misgovernance has straddled it with poor structure and poverty( Osaghae, 2005). There are pitfalls of implicit abuse, low position mindfulness, poor request penetration, low operating capital as well as low capacity for retention and acceptance of foreign pitfalls( Daniels, 2008). In this environment, supervision and control of the country’s insurance sector is maybe regarded as a sine qua nonfor the conduct of insurance business, and clearly so, in an age of regulation indeed if governments can not( and should not) regulate everything( Scott, 2008), the environment of a developing country with poor structure informs the need for a strong nonsupervisory governance for insurance business considering its high- abuse eventuality mentioned before. The challenge of course is how to insure the institution of an applicable and acceptable system of supervision and control.

The enactment of the Insurance Companies Act of 1961 pronounced the first direct measure taken by Government to establish and organise the insurance assiduity. By the vittles of the Act, the office of the Registrar of Insurance was created to supervise insurance practice in Nigeria. Other vittles of the Act included minimal capital demand and other conditions for enrollment , monitoring and control of insurance operations generally. This was followed by a series of legislations decades after which sought to foster the course of insurance regulation in the country, and this exploration study is meant to critically dissect the problems and prospects of similar supervision and control.

The National Insurance Commission( NAICOM) is the nonsupervisory body of insurance assiduity. NAICOM’s Director( Inspectorate), Barineka Thompson stated that the commission has concludedarrangements to move eventually from rules- grounded supervision to threat- grounded supervision by the end of 2013 in order to strengthen its supervision and enforcement sweats. He stated that the trouble by the commission is to effectively and efficiently regulate the conditioning of the insurance sector

Statement Of The Problem

The problems to be addressed by this exploration work include the following

1. shy government supervision and control of the insurance assiduity in Nigeria.

2. The presence of an ineffective commercial governance system in the insurance sector.

3. deficit of trained/ good labor force.

Objects Of The Study

The broad ideal of this exploration work is to estimate the problems and prospects of government supervision and control of insurance assiduity in Nigeria. The specific objects include the following

1. To examine the acceptability of government supervision and control of the insurance assiduity.

2. To probe the extent to which commercial governance of the Nigerian insurance sector impacts on its supervision and control.

3. To probe whether there’s deficit of trained/ good labor force.

Exploration Questions

The following exploration questions are formulated for the purpose of this exploration study

1. Is there acceptable supervision and control of the insurance assiduity in Nigeria?

2. Does commercial governance of the Nigerian insurance sector impacts on its supervision and control?

3. Does deficit of trained/ good labor force factor lead to non compliance with law governing the conduct of insurance business by some drivers in the sector?

Exploration Suppositions

The following suppositions are formulated for the purpose of this exploration work

HO There’s shy government supervision and control of the insurance assiduity in Nigeria.

H