Insurance Regulation in the General Agreement on Trade in Services: A Model for Liberalisation and Development in Nigeria

This thesis argues that the potential for the development of the Nigerian economy could be enhanced through reforms and unilateral liberalisation of the insurance market using the WTO/GATS model before further locked in commitments. The argument is premised on the analyses of the socio-economic functions of insurance in providing financial stability and welfare for the society and the developmental opportunities within the liberalisation framework of the WTO/GATS as opposed to other alternatives such as regional or bilateral integration. First, the framework serves as a regulatory model on which reforms could be based for efficiency, competitiveness, development and growth. Secondly, it provides a multilateral trading platform guided by trade enhancing rules and principles of the WTO, combined with GATS bottom up approach, progressive liberalisation and technical assistance to developing countries for greater participation in negotiations. Using the doctrinal analysis and the social science survey technique, this study demonstrates that the legislative and supervisory framework of the Nigerian insurance industry is currently inadequate to provide the growth functions. The problems include structural challenges such as low capacity due to small size of firms, obsolete products and unproductive business processes, unethical practices and a supervisory agency lacking adequate resources, powers, and independence. Others are the restrictive trade practices hindering foreign participation coupled with low insurance awareness and penetration. The thesis recommends reforms using the GATS model aimed at streamlining the laws particularly with regards to foreign insurers’ participation and the adoption of a bi-polar system of supervision to meet the current capacity inadequacies of NAICOM. The adoption of risk based regimes and principled based regulation is also recommended before further locked in commitments which would enhance growth and development.