Insurance regulator plans to review law

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By Jackson Okoth

Industry Regulator Insurance Regulatory Authority (IRA) is preparing to review the Insurance Act to put the sector into shape.

This long awaited review of the industry’s regulatory environment is happening when the business is facing challenges of poor corporate governance, weak financial strength and negative perception from the public.

“The review is meant to promote efficiency of the insurance industry, facilitate and support access for insurance services and offer meaningful policy holder compensation and protection”, said Sammy Makove, chief executive officer IRA.

The insurance commissioner spoke during the launch of IRA’s strategic plan and service delivery charter. As part of this review, a task force has already been appointed to review the current public service vehicle (PSV) underwriting policies.

“This task force is almost completing its assignment and is expected to present its recommendations to the finance minister in a month,” said Makove.

PSV underwriting has in the past been given a wide berth by insurance firms, owing to high incidences of fraudulent claims.

Invesco is the latest PSV underwriting firm to go under in recent months. Another PSV underwriter is currently experiencing liquidity problems and has been issuing bouncing cheques to its clients.

Previously supervised by a department at Treasury, formation of IRA has rekindled hopes that the insurance industry is on the path of reforming and redeeming its dented image.

Changing attitudes

“Many Kenyans have had bad encounters with insurance providers and as a regulator, we are committed to changing this perception,” said Makove.

IRA intends to roll out a consumer education campaign to educate Kenyans on the importance of insurance.

While an increasing number of new products are entering the market, the regulator says the public is still underserved with a lot of room for innovation still existing.

To improve the quality of services offered by providers, IRA has put in place new requirements for training of the insurance service providers before licensing.

The regulator will be publishing the names of all licensed companies soon. Part of the industry’s poor image stems from the fact that selling agents do not make full disclosures before a clients signs an insurance contract.

There is also a general lack of awareness on what insurance can and cannot do.

But the establishment of IRA is set to solve the industry’s numerous challenges, especially fraudulent activities in the PSV underwriting business which has buried many players in the past.

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