The insurance act of Kenya is in chapter 487 of the Kenyan laws. The act was enacted in 1984 and it has been a vital tool in regulation of the insurance industry. The act started operating in early 1987 and it has evolved to less than a superlative piece of legislation and a tool that respond to the fluctuating insurance industry.
Over the two decades of its existence, the act has been revolutionized substantially on piecemeal basis. However, it has not reached the standards of present insurance world. This has led to the review of the act in order to come up with a frame work that fits in perfectly with the advance and functionality of the industry.
So what does the act have to do with individuals or business in Kenya? Can it help the policy holder such as the case in the Kimathi House Fire or is it just another of Kenyan laws that go nowhere?
Part II of the insurance act of Kenya
The insurance act of Kenya has been divided into over 10 parts, and each part contains subdivisions with different entities but all based on insurance.
Part two of the act contains is entailed of appointment, power and duties of the commissioner of insurance. The part has been farther divided into the following segments;
- 3-establishment of the authority
- 3A-objects and functions of the Authority
- 3B-board of directors
- 3C-powers of the board
- 3D-remuneration of Board members
- 3E-Commisioner of insurance
- 3F-appointment of secretary and other staff
- 3G-common seal of Authority
The fourth part is entailed of insurance regulatory fund, financial year and annual estimates, accounts and audits, supersession. The fifth part contains of particular duties of a commissioner, the sixth, delegation by a commissioner.
It has other sections up to 18 that involve mattes to do with investigation, power, protection, examination and secrecy.
The Draft Insurance Bill of Kenya 2011
The bill was drawn up with a purpose of supporting the insurance industry towards achieving its goals and objectives. Insurance contributes positively to the Kenyan economy as it plays a vital role in the financial services zone.
The bill is lenient on Enforcement of a proper framework that enhances development of ICT (Information Communication Technology) for the industry.
It is also for the modernization of the existing legislation in harmony with up to date drafting principals. This is to ensure the provisions are positive and in a comprehensive language and concepts that can be understood by stakeholders.
The legislation is also based on the ICP’s (Insurance Core Principles) which is a development of IAIS (International Association of Insurance Supervisors).
It is also bent on rise of the importance of commercial governance and hazard management in the insurance business stakeholders.
Importance of the Insurance Act of Kenya and the draft insurance bill
The major objective of the act is to provide a harmonized, comprehensive and effective legal framework for the management of the insurance industry in an aim to achieve the following;
- Control and restrictions on who can or cannot carry out insurance business in Kenya;
- Consistent ways of protecting policy holders for continued advancement of an aggressive, innovative and practical insurance market;
- Protect policyholders’ interests by imposing primary responsibilities to the senior management and directors of an insurance company;
The insurance act of Kenya is also responsible for providing supervision of licenses that are issued by the ISA (Insurance Regulatory Authority).
You can download the Insurance Act of Kenya