New insurance and reinsurance firms will part with Sh300,000 and Sh50,000 respectively, to acquire a licence under a new fee structure published by the Treasury.
Existing companies will part with half the amount each year as subscription fees or risk hefty fines and revocation of their licences.
New insurance and reinsurance firms will part with Sh300,000 and Sh50,000 respectively, to acquire a licence under a new fee structure published by the Treasury.
Existing companies will part with half the amount each year as subscription fees or risk hefty fines and revocation of their licences.
The insurance amendment regulations 2021 published by Treasury set out payment of Sh150,000 for registration and a further Sh150,000 as the annual fee for insurance firms while re-insurance firms will pay Sh250,000 for registration and a similar amount as a yearly subscription.
Treasury introduced a new rule in the Finance Act stating that each insurer is required to pay an annual fee to enhance the Insurance Regulatory Authority’s (IRA) supervision.
The registration fees will be one-off but the subscription fee shall be payable annually on or before September 30 each year. The commencement date was, however pushed to January 2022.
“The authority may with respect to an insurer that fails to pay the annual fee on the date specified impose a penalty of Sh20,000 for each day the fines remain unpaid and cancel the insurers' licence,” Treasury Cabinet Secretary Ukur Yatani said in the insurance amendment regulations 2021.
Kenya has 56 insurance companies offering both general and long-term products and five re-insurance firms which will earn the IRA Sh9.6 million to be submitted to the exchequer.
IRA said being a state agency it collects the cash and draw a budget which is taken to Treasury for approval.
“All that is collected is not ours until we are allowed to use. Surplus of course goes to the Treasury,” IRA said in an emailed response.
The new cost of running the insurance business comes at a time where firms have shown great resilience in the wake of the Covid-19 pandemic.
Insurance companies made considerable profits despite the pandemic with underwriting results in the general insurance business, improving significantly by 60.3 percent from a loss of Sh2.97 billion in the same period last year to a loss of Sh1.18 billion.
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