Markets & Finance

Insurance regulator gets new boss as long-serving Makove departs

sammy

Sammy Makove has left the Insurance Regulatory Authority (IRA) after 15 years at the helm. PHOTO | FILE

Sammy Makove, the long-serving chief executive of Insurance Regulatory Authority (IRA), has exited after being at the helm of the industry for 15 years.

Mr Makove’s second four-year term ended last year but he received a one-year contract extension ending next January.

He served in the same capacity since IRA was created as an independent regulator in 2007 and had previously supervised the industry as commissioner of insurance in the Ministry of Finance since 2002.

Godfrey Kiptum has been appointed the acting commissioner of insurance and CEO of the regulator.
“Mr Kiptum replaces the long serving Commissioner of Insurance and chief executive Sammy Makove, who is proceeding on terminal leave pending the expiry of his contract,” said the authority in a statement.

Mr Kiptum has served at the IRA for eight years and was its chief manager for human capital development and administration.

The soft-spoken Mr Makove, has been cited for being lenient in enforcing regulatory requirements as he sought to accommodate laggards in fear that withdrawal of operating licences would erode public confidence.

“You have to think of the overall effect of your actions as a regulator – taking immediate action is sometimes not the preferred action,” said insurance industry analyst Isaac Ngaru while praising Mr Makove’s performance.

Mr Makove will be credited with introducing the risk-based supervision that is still being implemented, which ensures shareholders of an insurer inject capital matching the type of business they take.

He also introduced the electronic regulatory system in 2014 in a move to curb cooking of books in the industry.

READ: DPP wants police to finalise fraud investigation against insurance boss

Several companies have sunk the last 20 years including Kenya National Assurance Company in 1996, Access Insurance, Stallion, Liberty, Lakestar, United, Standard Assurance, Blue Shield, Concord and Invesco.

Invesco has been revived with fresh injection of capital from Matatu Owners Association.

Mr Ngaru noted failure to consolidate the sector was one of Mr Makove’s shortcomings. There are 43 licensed insurance firms in the country while penetration has remained low with total premiums collected being less than three per cent of the Gross Domestic Product.

Under Mr Makove’s tenure banks were allowed to distribute insurance services through bancassurance. The model has been criticised by other agents who feel the market has been tilted to favour the lenders.

“We differed on the entry of banks in the industry and the way they have been bulldozing the industry – we hold that there were not enough negotiations and it was too early to let them in,” said the chairman of Bima Intermediaries Association of Kenya, Washington Ndegea.

Mr Makove was under investigation by the police this year after Blue Shield Insurance, which is under statutory management, accused him of failing to account for over Sh400 million rent collected from a building owned by the company.

Shareholders of the insurer were of the view that prolonging the statutory management period of Blue Shield Insurance from September 2011 to date had facilitated the alleged misappropriation of the rental income.

If Mr Kiptum is confirmed, he will represent an insider in the industry battling for shrinking volatile space with banks.