Directors and other bosses who mismanage insurance companies risk unspecified fines in the proposed overhaul of the law that seeks to empower the regulator and increase accountability.
Treasury Cabinet Secretary Njuguna Ndung’u said Thursday he has submitted to Parliament an Insurance (Amendment) Bill 2023 to introduce deterrent measures, including fines and penalties.
According to the Bill, any shareholder, director, principal officer or management staff of an insurer that commits offences including falsifying financial statements or steals from an insurance firm will face a fine of up to Sh5 million or two years in prison.
A repeat offence will see a fine of up to Sh10 million or five years in prison, according to the Bill.
The Insurance Act has been in place since 2008 and does not have “deterrent measures to motivate accountability” for directors and senior managers to uphold professional responsibility, he said.
"To address this shortcoming, I have submitted to this House the Insurance Amendment Bill, 2023 to provide for offences relating to the management of an insurer,” said Prof Ndung’u.
He said, without giving details, the Bill will also contain other amendments aimed at enhancing the efficiency of the Insurance Regulatory Authority (IRA) in securing the industry.
Many insurers in Kenya are facing sustained customer complaints over delays in paying claims, with some collapsing with customers’ money.
Resolution Insurance, United Insurance Company and Blue Shield Insurance are all under statutory management while Concord Insurance and Standard Assurance Kenya are under liquidation, with many customers yet to be compensated.
