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Insurance brokers blame agencies, counties for late premiums remission

IRA

Insurance Regulatory Authority CEO Godfrey Kiptum. FILE PHOTO | NMG

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Summary

  • Insurance brokers have blamed counties and State agencies for delayed remission of premiums to insurance companies.
  • The Association of Insurance Brokers of Kenya (AIBK) said that it was unable to remit about Sh13 billion in premiums to insurers from government agencies, among other clients.
  • State institutions have been blaming the government for persistent late disbursements that disrupt services such as payments to suppliers, health workers, among others.

Insurance brokers have blamed counties and State agencies for delayed remission of premiums to insurance companies.

The Association of Insurance Brokers of Kenya (AIBK) said that it was unable to remit about Sh13 billion in premiums to insurers from government agencies, among other clients.

State institutions have been blaming the government for persistent late disbursements that disrupt services such as payments to suppliers, health workers, among others.

Only in January, for example, some Sh34.6 billion meant for counties were lying idle at the Central Bank of Kenya (CBK) amid an outcry from county bosses.

“We put a figure which was about Sh13 billion (unremitted premiums) and we were further able to demonstrate that a lot of the money was still owed to us by our clients and from government agencies,” AIBK Chairman Anthony Mwangi said.

Failure to remit premiums on time exposes businesses, individuals, and households to losses of their properties and investments when they make insurance claims.

The Insurance Regulatory Authority (IRA) said in its 2020 report that insurance brokers, agents, and banks owed insurers Sh38.1 billion in unpaid premiums.

Two weeks ago, AIBK said that about seven insurance brokerage firms were deregistered last year by the IRA for not complying with the Insurance Act.

IRA last year heightened crackdown on insurance agents and brokers who had not met its stringent license renewal conditions such as mandatory remittance of outstanding premiums to insurance companies.

Insurance penetration in Kenya dropped to 2.43 percent of Gross Domestic Product (GDP) -- the lowest in 15 years -- and was partly blamed on unpaid claims.

A survey by Kenbright Actuarial & Financial Services shows that 10 percent of those who had not renewed their cover attributed this to delay or non-payment of previous claims.