THE EFFECTIVENESS OF NON-BANK FIANNCIAL ISNTITUTION ON THE GROWTH ON NIGERIA ECONOMY (A CASE STUDY OF NICON INSURANCE)

1.0       INTRODUCTION

It is very obvious that the financial system in any economy is the bedrock within which capital is formulated, those take place  and it made possible by the intermediation of bank and non bank financial institution.  

1.1       BACK GROUND OF THE STUDY

The non banking financial institutions are the type of specialist intermediaries, through they are not bank whose financial resource are primary from deposit their participation is centered on the function of accumulation of longer term saving from either corporate bodies or from individual as well as channeling these saving to individual corporate bodies and government for the purpose of productive investment and economic growth. These financial intermediaries are not withdrawable on demand also they do not issue cheque like the bank, their function are limited to certain specific area these institution which have been of very good advantage  to a developing economy like Nigeria contribute immensely to the development economic growth of the country.

The non banking financial institution are classify into difference categories namely:

  1. Insurance  companies
  2. Co-operative, tariff and credit societies              
  3. Financial house
  4. Pension fund
  5. State finance corporation

CHAPTER ONE

1.2       OBJECTIVE OF THE STUDY

The basic fact under these objective of the study is to encapsulate the contribution of insurance companies to the development of our country Nigeria. At this junction, the insurance companies (NICON) promote  the business risk of both business and agricultural sector, financing the group between the rich and the poor, also safeguarding against numerous risk to which capital is exposed and take part in promoting bilateral and multilateral trade. For example international trade would be greatly impeded if insurance and export credit guarantee insurance schemes were not available.

Furthermore, the insurance companies show different policy which people can venture into i.e. whole life insurance policy and non life insurance policy and at the same time practice both policy, under the whole life insurance policy payment become due on the death of the life assumed, while in non life insurance policy payment became due at the state data it has been mentioned above that it is possible for people to take part in both polices this make it possible, according to the guide line produce by insurance companies degree and some immediate benefit in taking at a time.   

1.3       PROBLEM OF THE STUDY

For the purpose of literacy we categorically state from the onset that non-banking financial institution constitute and indispensable organ in achieving economic growth and development of any nation like Nigeria.

However there exist a paradoxical situation within context when in spite of the realization of this significant percentage of Nigeria population area yet to be incorporated into non-banking financial institution are  the best word to describe the attribution on the other hand the lack of public awareness about the usefulness of non-banking financial institution like insurance companies (NICON) and other financial house, people do not know their usefulness and importance of their services rendered.

The poor development of non-banking financial institution as well as the whole economy, such as quality of insurance companies (NICON) service economic moral, social political and even religions factor the project therefore delves into these problem and offer constructive measure of suggestion that could of immense help in achieving better non-banking financial institution in Nigeria.

1.3       SCOPE OF THE STUDY

This study has it main focus of highlighting the effectiveness, regulation and economical important of non-banking financial institution on the growth of Nigeria economy.

It helps to highlighting the historical background and the nature of insurance companies. Moreover it also has the case study of the above mention named insurance company, which is National Insurance Corporation of Nigeria (NICON) the include the history, effectiveness and activities of the corporation (NICON).

1.5       LIMITATION OF THE STUDY

The major difficulties encountered during this study are just the administrative bottle neck and unwarranted bureaucratic redotarism of obtaining information from the public function.                                

Some other Problems Encountered During the Study are:

iInadequate data due to haphazard record keeping

ii          the uncooperative attitude of the people most especially the literates one and even the learned people were reluctant to give adequate information.

In view of these alternative means were explored from the National Insurance Corporation of Nigeria (NICON), textbook and different journal book.

There is limitation in data collation for the purpose of inter company comparison. It would have been appropriate to collate various companies financial statement for the purpose of analysis them. This was not possible simply because some companies were not willing to release their financial statement.

1.6              DEFINITION OF TERMS

INSURER:     This simply means the insurance companies that issued insurance policy

INSURED:     This means the customer that is operating insurance policy with the insurance

companies

SUM ASSURED/INSURED: This simply means the amount to be paid as compensation

PROPOSAL FORM: This are the form that are pre-prepared questionnaire issued by the insurer to be completed by either the propose or his agent and which ask question about the subject matter of the insurance since the insurer will use the information to assess a premium, the prospective insured must disclose all material circumstance in utmost good faith, whether or not he is asked form them an form.

The solution to the questionnaire will assist the insurer to decide whether to accept the contract or not if the proposal is accepted by the insurer. The first premium is paid and the insurance of the cover note.

COVER NOTE: This is a note issued to the insured by the insurer after the insurer has accepted the risk in principle and insured has made part payment of the premium this will served as a temporary note before a certificate of insurance is issued after the proposal form has been processed and the insure is satisfied.

The cover note lasts for one mouth, within this period a certificate of insurance is expected to be issued.

CERTIFICATE OF INSURANCE: this is a certificate issued by the insurer, when the insured has made full payment of his premium after a month of the Cover Note. In circumstance, when insurance cover is compulsory by law it is used for a certificate of insurance to be required by the statue.

  1. Employer’s liability insurance certificate
  2. Motor insurance certificate.

PREMIUM: This is a certain amount of money to be paid or paid by insured to the insurer for his insurance policy. The estimation of premium is based on the on the I formation supplied in the proposal form, it may be paid weekly, monthly or yearly.

POLICY AGREEMENT: This stand for an agreement between the insurer (insurance companies) and the insured, this is different from insurance policy because insurance refer to different class of insurance like marine policies and accident policies e.t.c.

SUBROGATION: This term refer to the right of the insure has against the insured after he has been fully indemnified and take over not only what is left of the property, but all the legal and right to sue the third part for damages, if an insurer pay for a total loss, he may take over the subject matter and right attaching to it in a partial loss, he may take over the right but not the subject matter.

ACTUARY: An expert in the calculation of risk and premium

EX-GRETA PAYMENT: This is payment made by the insurer to an insured out of sympathy and outside legal obligation.

SURRENDER VALUE: This is a proportion of the amount contributed payable to the assure who whishes to discontinue with his life endowment policy.

UNDERWRITERS: This is the person that perform the task of underwriting, that is some one on behalf of the insurer must assess the risk of loss being proposed and decide whether it is acceptable or not when risk is offered by a prospective insured if it is acceptable the under writer must decide on the rate of premium to be changed and the term and condition to be imposed on an insurance contract. The main business is cover or under writers a portion of the risks. This is more common in marine insurance where a ship may be insured for #150,000.00 and three (3) insurer can agree to insure the ship, that mean each insurers liability will be limited to #50,000 if there is an occurrence  of the risk.

REINSURANCE: As it has been noted above the risk involved in a struggle venture can be too huge for insurance company to bear one way of spreading out such risk through insurance.

The transfer of risk from one insurance company to another insurer (the re-insurer) all or part of its liabilities in respect of claims arising under the contract of insurance that is writes. This is a risk insured by Mr. AB with company EF etc the purpose is to spread the risk so as to reduce the Wight of loss.

OVER INSURANCE: This happen when properly is over insured for more than its worth. There is no advantage in this, as an insurer will never pay more than the true VALUE of the properties.

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How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

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