The regulation of the Nigerian life insurance industry, 1960-1988

Abstract

This thesis examines the regulation of the Nigerian life insurance industry during the 1960-1988 period. The role and nature of regulatory policy, the extent of industry compliance with regulatory rules, and the degree to which policy formulation is subject to industry influence are examined. The changes in life industry structure, behaviour and performance are also examined in relation to the regulatory developments over the period. In this context, the effects of protectionist and other regulatory policies implemented in the industry are examined within the political economical framework of Nigeria. Three types of analytical methods are employed in the study; the historical method, the descriptive survey method and the empirical method. Chapter one contains an introduction to the thesis and in chapters two and three, the literature on the theory of regulation, the characteristics of developing country insurance markets and the arguments in favour of and against the implementation of protectionist policy in these markets are reviewed. Chapter four places the study in context by briefly examining the political economy of Nigeria. This discussion forms the basis for the analysis of regulation and regulatory developments in chapter five. Chapter six contains the descriptive and empirical analyses of the impact of policy on market structure, behaviour and perrormance. In the last chapter conclusions are made and policy recommendations presented. Although the stated objectives of regulation are a concern with the consumer and national economic interest, the results of the analyses lead to the conclusions that, among other things, (1) the development, implementation and supervision of policy has been impeded by an underresourced and understaffed regulatory agency (2) the implementation of protectionist policies in the Nigerian life market has not been successful in terms of the stated policy objectives (3) the consumer interest is in fact not being adequately protected and (4) the lack of cooperation between life offices has contributed to the industry's inability to influence regulatory policy in it's favour. It is recommended, among other things, that (1) the Government should withdraw from intensive participation in the life market and should channel it's resources towards maintaining an effective regulatory mechanism and (2) the implementation of protectionist policies in the market should be made with respect to the prevailing socio-economic and political conditions for maximum effectiveness