Insurance regulators from the East African Community meet in Arusha on Thursday in efforts to adopt common regulatory standards meant to protect policyholders and ensure stability of the sector.
The meeting, called by the East African Insurance Supervisory Association (EAISA), will explore emerging issues including common regulatory standards, according to an announcement.
East African countries are seeking to harmonise rules to supervise companies in areas such as corporate governance, capitalisation, investment, stress testing, supervision and winding up of insurance firms.
“With the cross-border supervision guidelines for insurance companies that have stretched their wings in more than one country, the insurance industry will be able to register significant growth and penetration to benefit the underserved population,” said EAISA chairman and Uganda Insurance Regulatory Authority chief executive Ibrahim Kaddunabbi Lubega earlier.
In 2010, EAC regulators signed an MoU on sharing financial data on the status of insurance firms and to co-ordinate supervision of insurers which operate regionally with a view to reducing contagion risks.
The programme, which is being implemented under EAISA, is part of efforts to harmonise insurance regulations within the EAC and stabilise the industry.
Kenya recently introduced a number of regulatory changes to its insurance sector, including a move towards risk-based capital, increased capital requirements, new guidelines for short-term business and Takaful rules.
Insurance penetration in the region has stagnated at below two per cent for decades.
Uganda and Tanzania have the lowest penetration ratios of 0.9 per cent each, while Kenya and Rwanda have penetration levels of three per cent and 1.6 per cent respectively.
South Africa has the highest penetration ratio on the continent at 14 per cent.