The goal of this study is to examine the impact of government policies on the regulation of insurance businesses operating in Nigeria. The government’s role in supervising, regulating, and controlling the actions of insurance companies and intermediaries is to protect the insuring public’s interests and prevent them from being exploited by untrustworthy insurers. Due to the intangible nature of insurance products, the government needs to ensure that those involved are competent individuals who will keep their promises and commitments when the time comes. Because of the complexities of the insurance industry, it is also important for the government to regulate policyholders. The government has also discovered that there is a breach of confidence in insurance transistors. The research aims to assess the efficacy of government policies in regulating Nigerian insurance companies. The insurance sector in Nigeria suffers from a severe dearth of high-level manpower for most types of insurance, and many Nigerians lose money as a result of a lack of insurance understanding. As a result of this situation, the government should promote insurance-related initiatives to the general population in order to educate them on the benefits of insurance as a result of the constant financial losses they suffer as a result of a lack of insurance knowledge.
BACKGROUND OF THE STUDY
“Risk is an ancient phenomenon that has existed since the dawn of time. When the future is unknown, there is risk” (Lemon 1989: 17). This indicates that the word conveys some level of skepticism about the future, and that the outcome may be worse than it is now. This individual may be considered a risk manager in his day-to-day operations, as he does everything he can to reduce, eliminate, avoid, retain, or share risk when it exists.
Although, prior to the establishment of insurance firms in Nigeria, some kinds of risk management existed, such as the extended family system, age grade associations, and others. The British introduced insurance in its present form to Nigeria. The Royal Exchange Assurance Business was founded in 1921 and was the first insurance company in Nigeria to launch a full branch. Three more businesses arose in 1949. Africa Insurance Company was founded in 1958. The number of insurance companies has increased to 70 by 1965. The Nigeria Re-insurance Firm was founded in 1977 as a federally controlled insurance company. Nigeria, on the other hand, was a British colony until 1960, when it earned political independence and became a developing country. A large number of insurance businesses have been established since 1960. Insurance is a modern means of spreading risk over a large number of people so that the few unfortunate ones o r those who sustain or experience loss do not have to bear it alone.
The following are examples of insurance firms’ secondary functions:
1. The provision of loans based on the security of a life insurance policy.
2. Encourage and promote men and women who work in the commercial sector.
The money saved by the insurers is re-invested in state-approved securities, allowing the state to maintain a consistent flow of investment funds for the development and promotion of local enterprises that benefit the community.
Insurance is a contract in which a person known as the insurer or assurer undertakes to cover another person known as the insured or assured against loss resulting from the occurrence of specific events in exchange for money given to him or her known as premium.
The goal of insurance is to reimburse or recompense the sufferer for his financial loss. It is important to note that insurance does not eliminate the loss or prevent the disaster from occurring; rather, it softens the blow in a purely financial sense by providing monetary compensation to the victim, putting him in the same financial position as he was prior to the loss, as long as the terms of the policy are followed.
The transfer of insurance business from one insurance firm to another is known as re-insurance. The direct insurer or ceding company is the initial insurer who obtains the insurance contract from the insured or assured. The need for the original insurer to disperse the risk he took on led to the development of re-insurance.