The user tries to connect to the database through Toad as a SYSTEM user as SYSOPER and then gets the error:
ORA-01031: insufficient privilege
The issue is caused because the SYSOPER privilege is not granted to the SYSTEM user.
Please try running the following query to check your privileges for SYSOPER and SYSDBA:
select
decode(sysdba, 'TRUE', 'Yes', 'No') sysdba,
decode(sysoper, 'TRUE', 'Yes', 'No') sysoper
FROM V$PWFILE_USERS
WHERE USERNAME = 'SYSTEM'
If no results are returned, then the privileges are not set. Have your Oracle DBA set the correct privileges for the SYSTEM user. Then you should be able to connect without issues.
<See attached Screen Shot>
User tried connecting as SYSTEM user as SYSOPER and was able to successfully connect.
NOTE: User had the 8.1.7 version of SQL Plus.