ORA-01031: insufficient privileges

Cause: An attempt was made to change the current username or password without the appropriate privilege. This error also occurs if attempting to install a database without the necessary operating system privileges. This error may occur if the user was granted the necessary privilege at a higher label than the current login.

Action: Ask the database administrator to perform the operation or grant the required privileges. For Trusted Oracle users getting this error although granted the the appropriate privilege at a higher label, ask the database administrator to regrant the privilege at the appropriate label.
For the DBA, the ORA-01031 can happen if the target OS executables do not have read and execute permissions (e.g. (770) in UNIX/Linux), and ensure that the oracle user is a member of the dba group (e.g. /etc/group). There are similar permission in the Windows registry.