Insurance Regulation In Nigeria: Regulatory Federalism And The National Association Of Insurance Commissioners

The focus of this work was not just an appraisal of the clearly established regulatory framework as may be found in the insurance statutes and regulations but it also highlighted areas of significant deficiencies and their consequence on the achievement of the underpinning objectives for regulating the insurance industry. The importance of an adequate regulatory framework in any discipline cannot be over-emphasized. This is more so in insurance where the potential for fraud is real as the subject-matter of the insurance is typically a mere ‘promise’, a chose in action or liability which cannot be seen or inspected physically; similarly, a failure could spell far reaching consequences on an economy as exemplified by the failure of the American International Group (AIG), an octopus in the insurance industry, the world’s largest insurance company by assets and had had subsidiaries in UK, France, Hong-Kong, Australia, Pakistan, Philippines, Singapore, India, etc, and was engaged in various business activities. The legal regulatory infrastructure for insurance in Nigeria may be described as extensive. However, there are gaps in which the regulatory regime requires further revisit either by the inclusion of new guidelines or the establishment of additional specialist units in existing regulatory bodies or the establishment of new distinct regulatory bodies. In doing this, we considered the spectrum of existing legislation, drew parallels from other jurisdictions and explored the relationship of the National Insurance Commission to the regulation of other recognizable and or emerging Insurance aspects such as Friendly Societies, Cooperative Insurance, Mutual assurance societies, Insurance of captives and micro-insurance. The work also considered the possible influence that industry operators wield in the existing regulatory framework. Lastly, the work reflected on the adequacy of the existing regulatory framework on competition or anti-trust issues, and investment by insurers. The finding of the work is that the regulatory framework as it currently exists is inadequate to encapsulate all these issues afore-mentioned and that insurance consumers hardly play a role in ensuring a sound regulatory regime. Accordingly, we recommended legal reforms either by reworking the existing statutes to accommodate these issues or by creating subject specific bodies to adequately regulate the various aspects of the industry.