GOVERNMENT SUPERVISION AND CONTROL OF INSURANCE INDUSTRY IN NIGERIA PROBLEMS AND PROSPECTS.A RESEARCH PROJECT TOPICS ON INSURANCE
The aim of this research work is to appraise the problems and prospects of government supervision and control of insurance industry in Nigeria”. The specific objectives of this research study include the following: To examine the adequacy of government supervision and control of the insurance industry. To investigate the extent to which corporate governance of the Nigerian insurance sector impacts on its supervision and control.For a successful completion of this research work, the researcher made use of both primary and secondary methods of data collection for information gathering. Primary data were collected through: Questionnaire administration, Oral interview, and Personal observation. Secondary data were collected through; Periodicals and journals, Textbooks and lecture note books, and Internet. The data collected were presented in tables and analyzed with simple percentage while the hypotheses stated were tested with chi square. The summary of findings made by the researcher includes the following:The shortage of trained/qualified personnel is a factor behind non compliance with law governing the conduct of insurance business by some operators in the sector.Based on the findings, A strong and competitive insurance industry is a compelling imperative for Nigeria’s economic development and growth due to the fact that the country has a considerable high level of rural population, a good proportion of which are either illiterate or with very low-levels of basic education. In recommendation, the regulators of the Nigerian insurance sector should adopt effective and efficient policies that can properly checkmate insurance activities in the country and ensure that such policies go in accordance with insurance principles in the country.
1.1 BACKGROUND OF THE STUDY
Insurance is a safe-guard against risks. Any device aimed at reducing the chances of a risk occurring, when it happens, reducing the extent of its damage and providing 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 insured a fixed amount of money in the occurrence of a specified insured event.
Obasi (2010) defines it as “a contract between the person who buys insurance and an insurance company who sold the policy”. He opined that “by entering into the contract, the insurance company agrees to pay the policy holder or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal term called insurance premiums”. The types of insurance products available in Nigeria include, motor insurance; general accident insurance; fire insurance; marine, aviation and transit insurance; life insurance; oil and gas insurance; health insurance; among others.
Insurance industry is generally seen as the backbone of any country’s economy, since it ensures financial security, serves as an important component in the financial intermediation chain, and offers a ready source of long term capital for infrastructural projects.
Babalola (2008) argues that the insurance industry “mitigates the impacts of risks and positively correlates to growth as entrepreneurs cover their exposures, otherwise risk-taking abilities are hampered”.