Theory and determinants of regulatory effectiveness in a formal microinsurance context: The insurers’ perspectives

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Abstract

Using a 60-item questionnaire with an 8-point Likert scale, we conducted a survey (solely amongst insurers) to investigate possible determinants of regulatory effectiveness (RE) in the Nigerian microinsurance sector. This survey was further triangulated with key industry reports, coupled with respondent-provided qualitative validation and real scenario-based instances, to soundly justify the responses/opinions of survey participants. In this paper, RE was measured by the level of achievement on regulatory mandates (RM), as opined/justified by informed respondents. This research was conducted to re-sensitize/guide governments, regulators, researchers and other stakeholders on what fosters/impedes RE and the need to sustainably manage these determinants, in order to promote formal microinsurance development (FMID). Our result revealed that the severity of determinants’ impact (in their current/snapshot state) on five aggregated RM was in the following decreasing order: “level of corruption”, “clarity of mandate”, “national culture”, “technology”, “regulatory flexibility/innovation”, “organisational structure”, “participation/consultation”, “organisational culture”, “regulatory autonomy” and lastly, “resources” has the least negative impact. The “socio-political legitimacy” had no impact on the five RM, while “support-from-development-partners” in its current/snapshot state is the only recorded determinant exerting a positive impact on all the five RM (as aggregated). Consequently, the study guides relevant stakeholders to assiduously work towards managing these determinants (especially, the most severe ones such as “level-of-corruption”, “clarity-of-mandate”, etc.) in order to enhance RE and FMID.

Keywords: Regulatory Effectiveness (RE), Formal Microinsurance Development (FMID), Regulatory Mandates (RM), Determinants, Nigerian Microinsurance Sector, Rural Dwellers and Actors in the Informal Sectors (RDAIS)

Authors’ individual contribution: Conceptualization — E.A.O.; Methodology — E.A.O.; Resources — E.A.O. and J.D.L.; Writing — Original Draft — E.A.O.; Writing — Review & Editing — E.A.O. and J.D.L.; Supervision — J.D.L.; Funding Acquisition — J.D.L.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

Acknowledgements: The Authors warmly appreciate the financial support from FCT — Foundation for Science and Technology (Portugal), national funding through research grant (UIDB/04521/2020).

JEL Classification: G280, G220, L510

Received: 19.05.2022
Accepted: 11.11.2022
Published online: 15.11.2022

How to cite this paper: Osifodunrin, E. A., & Lopes, J. D. (2022). Theory and determinants of regulatory effectiveness in a formal microinsurance context: The insurers’ perspectives [Special issue]. Journal of Governance & Regulation, 11(4), 277–288. https://doi.org/10.22495/jgrv11i4siart8