This archive report was first published on 2 July 2020.
As the insurance industry struggles with the negative effects of COVID-19, the Insurance Regulatory Authority (IRA) is taking drastic action against errant insurance brokerage firms.
According to data from the IRA, insurance brokers hold KSh 14.8 Billion in outstanding premiums to insurance companies, a situation that has been exacerbated by the pandemic.
IRA Acting Chief Technical Manager Kalai Musee revealed that 14 insurance brokers did not respond to a circular sent in 2019, inquiring about the status of outstanding premiums.
“Fourteen insurance brokers did not respond to our circular. We are working on that and they are subject to de-registration,” said Musee.
As part of its efforts to cushion insurance agents from the financial strains brought about by COVID-19, the IRA also asked insurance companies to clear commissions owed to them.
However, the regulator's efforts have been met with resistance from some brokerage firms, with 82 firms being denied operating licenses in February 2020 for failing to remit outstanding premiums.
According to the IRA, licensing requirements for an insurance brokerage firm include a registration fee of KSh 10,000, a Bank Guarantee of KSh 3 Million, and a professional indemnity insurance policy of KSh 10 Million.
