The role of insurance and its regulation in development : Sudan and Tanzania

This thesis examines the experiences of Sudan and Tanzania in attempting to control their respective insurance industries to serve their economic development. The socio-political chemistry in each country has produced a certain policy towards the insurance institution. The Sudan opted to control its industry through a regulation code; Tanzania adopted nationalization as an ultimate form of control. The thesis examines the respective roles of the two regulation models in the development process, and argues that, on balance, a direct model of insurance control such as in Tanzania is more appropriate to the needs of underdeveloped countries than a regulatory model of the Sudanese type. This conclusion derives from insurance theory itself, and from the need to avoid the problems which afflict the regulatory model such as the technical difficulties which regulation involves, the weakness of the regulation agency vis-a-vis the industry, the influence of the latter upon the agency, the difficulty of monitoring solvency, and of enforcing investment regulations. In theory, the state is also more capable of protecting the public which seeks insurance cover from its own institution than when cover is purchased from private insurers. Most information relates to the period 1970-1977, and the thesis is largely based on fieldwork research in the Sudan and Tanzania and on secondary resources. Although the methods of control examined are largely legal methods an attempt is made to transcend law for a better understanding of the problems which afflict the institution. A legal doctrinal study preoccupied with the analysis of rules and procedures is unlikely to provide an insight into how the institution operates. Even less is it likely to be of value when legal rules are not truly reflective of practice. It is for this reason that the institution is studied in the wider political economy of the two countries