Lesson Notes By Weeks and Term - Senior Secondary 1
Historical development of insurance
Historical development of insurance
Term – 1st Term
Week: 3
Class: Senior Secondary School 1
Age: 15 years
Duration: 40 minutes of 2 periods each
Date:
Subject: Insurance
Topic:- Historical development of insurance
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures
INSTRUCTIONAL PROCEDURES
PERIOD 1-2
|
PRESENTATION |
TEACHER’S ACTIVITY |
STUDENT’S ACTIVITY |
|
STEP 1 INTRODUCTION |
The teacher reviews the previous lesson on the essential elements of an insurance contract |
Students pay attention |
|
STEP 2 EXPLANATION |
He discusses the origin of insurance. He highlight the major things that contributed to the growth of insurance
|
Students pay attention and participates |
|
STEP 3 DEMONSTRATION |
He distinguishes between the pre-independence insurance market from the post-independence insurance market He further outlines the major regulations that contributed to the growth of the insurance market |
Students pay attention and participate |
|
STEP 4 NOTE TAKING |
The teacher writes a summarized note on the board |
The students copy the note in their books |
NOTE
Origin of insurance
The origin of insurance dates back to the practice of merchants in Italy as early as the 12th century. By the 14th century, marine insurance (oldest form of insurance) had become established in Italy. By the 16th century, the practice of marine insurance had spread to other parts of Europe. In England, the business of insurance was initially transacted informally at a coffee house owned by a man called Lloyd in the city of London.
People who wished to have cover would pass round a slip of paper containing the details of insurance cover required to the people willing to provide it. The slip was initialed by those willing to accept a proportion of the risk. When the total amount of insurance required was fully initialed(underwritten), the contract was completed.
Major things that contributed to the growth of insurance
a.) The British Aviation Insurance group began offering aviation insurance in 1923.
b.) Fire insurance grew following the great fire of London of 1666.
c.) Fire office (the first fire insurance company) was founded in 1680 and changed its name to Phoneix in 1705
d.) The Friendly Society came in 1683 and the Amiable Contributor in 1696.
e.) Life assurance traced to the dark ages, to ancient civilization in Rome (Italy), where burial fund existed. There were burial societies or clubs (Roman Collegial) that rendered burial services by collecting contributions from their members to pay for funeral expenses.
f.) The first real evidence of life assurance took place in Britain on 15th June,1583. The policy was on the life of Williams Gribbons for a period of twelve months. The sum insured was paid at the death of the assured on 19th May, 1584.
Pre-independence insurance market
In Nigeria, the traditional concept of insurance is that of mutual insurance. This can be found in many customary or communal practices of various ethnic societies, whereby members of a family or community collectively come to aid another member in times of disaster or misfortune. Various traditional types of insurance existed which include age grades, social clubs and extended family system.
Benefits derived from belonging to the association include: provision of· cash, food, water, free labour in times of difficulty or disaster, or to meet funeral expenses as the case may be.
The first insurance company to open an office in Nigeria was the Royal· Exchange Assurance Company in 1921. It was then a branch of a parent company in England. Three others followed in 1949.
Post-independence insurance market
At independence in 1960, there were 28 insurance companies in the country. The three indigenous companies were; The Great Nigeria Insurance Company, The Nigerian General Insurance Company Limited and The Universal Insurance Company Limited.
The indigenous participation of Nigerians in insurance business witnessed the involvement of federal and regional governments, and private individuals. The federal government established the National Insurance Corporation of Nigeria (NICON) in 1969 and the Nigeria Reinsurance Corporation in 1977.
After independence, Nigerians acquired majority share in the foreign-owned insurance companies.
Major regulations that contributed to the growth of insurance.
a.) Before 1961, there was no statutory requirement for the registration of· insurance business in Nigeria.
b.) The first legislation; Insurance Companies Act 1961
c.) Insurance Companies Act of 1964
d.) Insurance Companies Act of 1976
e.) Insurance Decree 1996
f.) Insurance Decree 1997
Need for insurance regulations
a.) The first legislation; Insurance Companies Act 1961 to provide for· registration of insurance companies. The Act required any person wishing to transact business as insurer to register with the registrar of insurance.
b.) Insurance Companies Act of 1964; Insurance Companies Act of 1961 was amended in 1964. This Act made provision for the investment of insurance funds.
c.) Insurance Companies Act of 1976; both Acts of 1961 and 1964 was repealed in 1976. Under the 1976 Act, persons wishing to transact insurance business in Nigeria were required to be incorporated in Nigeria under the Companies Act 1968. The Act also prescribed the minimum paid-up capital of N500,000 for life insurance business and N300,000 for non-life insurance business and the sum not less than ten times the amount specified in respect of reinsurance business. The minimum paid-up capital is to be deposited with the Central Bank of Nigeria as a statutory deposit.
d.) Insurance Decree 1996; this was repealed by Insurance Act 1991 which put· the control under the National Insurance Supervision Board (NISB).
e.) Insurance Decree 1997; this changed the supervision body to National· Insurance Commission (NAICOM) headed by commissioner for insurance as applicable under National Insurance Supervision Board (NISB) for more effective control and better supervision of the industry. The Act increased the capital to N150,000,000 for life and N200,000,000 for general insurance, N350,000,000 for reinsurance companies.
EVALUATION: 1. Discuss the origin of insurance
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively