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Insurance Regulation in Aid of Development in the Third World: A Look at the Republic of Ghana
Published online by Cambridge University Press: 28 July 2009
Extract
The role of law as a tool in aid of development is extremely important to less developed economies. In the area of insurance where insurers act as mobilisers of vast amounts of capital, the importance of regulation as a tool facilitating development cannot be overemphasised.
In recognition of the increasing importance of insurance activity to the economies of less developed countries, the United Nations Conference on Trade and Development has played a leading role in helping developing countries fashion regulatory systems that maximise the contribution of their insurance industries to the development of their local economies.
This paper looks at the importance of insurance to the Ghanaian economy and discusses the use of insurance regulation to aid development. The paper first looks at insurance in relation to the national economy as a whole, examining how regulation is used to fulfil the various aspects of the industry's importance in aid of development. The paper then looks at the industry and the important sections of the economy, considering how regulation aids development in these areas by fulfilling the various objectives of the industry.
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- Research Article
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- Copyright © School of Oriental and African Studies 1986
References
1 See U.N.C.T.A.D., Insurance Legislation and Supervision in Developing Countries, TD/B/393, U.N., NY, 1972. For a synopsis of the regulatory law of various developing countries, see Crowe, R. M., Insurance in the World's Economies, Philadelphia, 1982.Google Scholar
2 See, Carter, R. L., Economics and Insurance, P. H. Press, 1972, 22–29.Google ScholarPubMed
3 At the time of promulgating this regulation, the cedi had the same value as the dollar. As recently as 1982, one dollar was worth 2.5 cedis. At the moment, one dollar is worth 90 cedis.
4 S.6 of the Insurance Act confines mutuals to life and health insurance.
5 Form COI/101/65 of Legislative Instrument 497 contains this declaration.
6 This provision was inserted in the Insurance Act by an amending law. (National Liberation Council Decree 181, 1967, Para. 2).
7 This replaces the original form in L.I. 497.
8 Amending L.I. 497 by inserting this new regulation. The forms are COI/111/66 and COI/111A/66.
9 These would be on Form COI/105/65. See Regulations 1 and 2 of L.I. 538.
10 These are known as examinations in Insurance Codes in the U.S.
11 The Minister responsible for overseeing the regulatory service.
12 Regulation 3(l)(a).
13 Regulation 3(1)(b).
14 See Carter, , op. cit., 30.Google Scholar
15 See Insurance in Ghana, Annual Official Report of the Insurance Commissioner. See also, Crowe, , op. cit., 273, where it is indicated that insurers invested a quarter of a million cedis in the Ghanaian economy in 1979.Google Scholar
16 The percentages vary with the class of insurance.
17 The Insurance (Investment of Funds) (Amendments) Instrument, 1967.
18 The nine consisted of seven private insurers, the government owned insurer and reinsurer. There are presently fourteen private companies. See Crowe, , op. cit., 269.Google Scholar
19 The British insurance industry has traditionally been its greatest earner of invisibles in international trade.
20 National Redemption Council Decree 95 (N.R.C.D. 95).
21 Supreme Military Council Decree 31 (S.M.C.D. 31).
22 L.I. 791.
23 Ghana Reinsurance Organization (G.R.O.).
24 S.3(l) of N.R.C.D. 95.
25 See, Insurance in Ghana, Annual Official Publication of the Insurance Commissioner of Ghana.
26 See Insurance Legislation and Supervision in Developing Countries, TD/B/393, U.N., NY, 1972.Google ScholarPubMed
27 Made up of individuals, families and unincorporated enterprises.
28 See Crowe, , op. cit., 273Google Scholar. These securities comprised treasury bills, development bonds and stock in government corporations.
29 In 1979 almost 140 million cedis were invested in non-government securities. See Crowe, , op. cit., 273.Google Scholar
30 Witness the present liability insurance crunch in the United States, affecting professionals, municipalities and corporations. This capacity problem has propelled some states to devise ways to alleviate the capacity problem. The Federal Government is also sponsoring tort liability reform measures.
31 For a detailed and more extensive treatment of insurance regulation in Ghana, see Achampong, F., “Statutory Regulation of Insurance Companies in Ghana: An Investigation, Analysis and Critique”, Ph.D. Dissertation, University of London, 1981.Google Scholar