This archive report was first published on 2 January 2020.
On January 2, 2020, a parliamentary committee in Kenya backed changes to the Insurance Act to ensure quick compensation for policyholders in case of insurer collapse.
The proposed changes, contained in the Insurance (Amendment) Bill, 2019, sponsored by Leader of Majority Aden Duale, aim to guarantee quick compensation for policyholders in case an insurance firm goes under.
Under the proposed changes, the receiver manager will have 12 months from the date of appointment to prepare and submit to the Commissioner a report on the financial position of the distressed insurer and advice on revival or liquidation.
Policyholders will then get their compensation immediately in case of a dissolution.
According to the bill's memorandum, the proposed law will also compel insurers to prepare claims payment returns and submit them in a manner prescribed by the Insurance Regulatory Authority (IRA).
Insurers who fail to prepare and submit financial returns at the end of each year shall be liable to a penalty of Sh200,000 and a further penalty of Sh10,000 for each day after the expiry of the prescribed period within which the return is to be submitted.
