Abstract

Journal of Economics and Management Studies,Kogi State University 2007, Volume 2 Number 1 pp-134-144 The paper identified specific areas of the financial system that needed proper restructuring. The paper identified reasons why past reforms failed in Nigeria among which are lack of commitment from the operators, lack of 100% autonomy for the Central Bank which is the apex authority, Lack of commitment to the success of the reforms by the operators of the financial system due to selfishness and fraudulent practice like round tripping to kill the economy and nature of Nigeria economy as a monoproduct nation. The Insurance industry is the nation risk bearer in the face of rapid economic development and reform. While the regulatory authority focuses attention on the restructuring of the Central Bank, Commercial Banks and the capital market, the insurance industry was totally neglected. The paper identified the necessity of restructuring the Nigerian insurance industry to be able to carry the weight of indemnifying transaction economic risk that may arise from globalization and internationalization of transactions that carry some risk. An analytical review of the sector was carried out to determine the various risks underwritten and the reinsurance policies across the border. It was discovered that the insurance industry upon which the industrial and governmental risks of the nation hung on was passing through national phenomenon financial distress. Some of them could not pay acceptable claims. Economic and financial crimes were discovered to be manifesting in the industry. The paper concludes that the following are necessary: new capital base for insurance companies, Merger and consolidation of the companies, establishment of strong re-insurance company in Nigeria, new products to enhance the growth of the industry, and empowerment of National Insurance Commission(NAICOM)