Insurance Act, 2006 (Act 724)

The National Insurance Commission is established by this Act and may, for its functions, acquire property and enter into contracts or other transactions.

The Commission must oversee and regulate insurance business, and perform listed functions like licensing insurers and intermediaries.

The Commission’s governing body is a Board made up of named categories of members, and the President appoints the Board members.

The Board must monitor and oversee the Commission’s operations and ensure its objects and functions are effectively implemented.

This section sets the tenure, resignation, vacancy, absence, and revocation rules for Board members.

The Board must meet at least every three months, follow the chairperson’s scheduling, use a quorum of five, decide by majority, and allow the chairperson to preside and break ties.

Board members with an interest in a matter must disclose that interest in writing and must not take part in the Board’s deliberations on that matter.

The Board may set up committees, choose who sits on them, and must decide each committee’s functions.

Board members and committee members must be paid allowances set by the Board with Ministerial approval.

The Board may hire a consultant or other expert and set the terms and conditions for that engagement.

The Minister may issue directives to the Board on policy matters for the Commission when carrying out its functions.

The President must appoint a Commissioner and a Deputy Commissioner of Insurance. The Commissioner runs the Commission day to day, may act in emergencies or for public interest, may delegate functions, and must tell the Board in writing within 14 days after taking emergency action.

The Commission must have an officer designated as Secretary to the Board, and the Secretary must carry out functions assigned by the Commissioner and the Board.

The President must appoint staff needed for the Commission’s work, public officers may be transferred or seconded to the Commission, and the Commission may engage advisers on the Board’s recommendation.

The President may delegate the power to appoint public officers under this Act, as allowed by article 195(2) of the Constitution.

The Commissioner must prepare annual estimates and a work programme before the financial year starts, send them to the Board, and the Board must consider and approve a budget and work programme by the stated deadlines.

Insurance licensees must pay a levy to the Commission each financial year, and the Commission must publish the levy formula, payment details, interest, and non-payment penalties in writing.

The Commission’s money may come from listed sources such as levies, grants, loans, donations, fees, fines, motor contributions, and other approved income.

The Commission must keep accounts and proper records in a form approved by the Auditor-General, and its accounts must be audited within three months after each financial year. The Auditor-General must also send the audited accounts to the Minister within that same period.

The Commission must send an annual report to the Minister after each financial year, and the Minister must then lay it before Parliament within two months of receiving it.

A qualifying limited liability company may apply to the Commission for an insurer’s licence, and the application must be written and include prescribed information, form, and documents.

The Commission may issue an insurer’s licence to an applicant, but only subject to conditions it determines and only if the listed qualification and suitability criteria are met.

An applicant cannot be issued an insurance licence unless the Commission is satisfied that the applicant, and certain related persons where applicable, are fit and proper.

The Commission may give an applicant written notice requiring higher capital or a higher solvency margin before a licence is issued or as a licence condition.

An insurer’s licence must be in writing and state the class of insurance business and any conditions applying to it.

The Commission must not license composite insurance businesses, and specialist life or non-life insurers must not later be licensed to switch into the other line.

An insurer must submit its licence to the Commission if the licence expires, is suspended or revoked, or the Commission requires it for a stated reason.

If the Commission issues a licence under section 22, it must publish notice of the issue in the Gazette and in a newspaper of mass circulation it chooses.

A licence expires 12 months after issue, and it may be renewed on application.

The Commission may change licence conditions for an insurer, and an insurer may ask in writing for a condition to be changed or removed.

The Commission may refuse, limit, suspend, or revoke a licence, and must notify the applicant or affected licence holder in writing with reasons.

If the Commission refuses a licence application, it must notify the applicant in writing and give reasons within 30 days.

A person refused a licence by the Commission may appeal to the High Court within 60 days; if the appeal succeeds, the Commission must license the applicant.

An insurer may apply to the Commission to renew its licence, but the application must be written, use the prescribed form and information, include prescribed documents and the renewal fee, and be filed at least three months before expiry unless the Commission allows a later date.

The Commission must renew an insurer’s licence if it is satisfied the insurer still meets the licence requirements and complies with the Act and regulations.

A person must not carry on or pretend to carry on a class of insurance business in the country without a valid licence, unless an exception in subsection (4) applies.

A person must not insure certain Ghana-based risks with an offshore insurer unless the Commission authorises it.

A person may apply for authorisation to contract with an offshore insurer, and the Commission may grant it subject to conditions.

Offshore insurers cannot use a representative, branch, or contact office in the country without prior written approval from the Commission.

The Commission may approve an application under section 39 and set conditions it considers appropriate. It may also vary, revoke, or add licence conditions for an offshore insurer after giving reasonable written notice.

An offshore insurer commits an offence if it carries on business contrary to section 39 or if it operates through a representative, branch, or contact office against Commission-imposed conditions.

An insurer must not carry on business except for its insurance business.

An insurer must submit its business plan to the Commission, and must operate substantially in line with the latest approved plan.

Insurance contracts entered into by an insurer after commencement are void if the insurer’s liability amount or maximum amount is uncertain when the contract is made.

An insurer must get the Commission’s prior written approval before issuing a new form of insurance product.

An insurer must keep its head office in Ghana and notify the Commission of its head office and registered office addresses.

An insurer may not open or operate an offshore representative, branch, or contact office unless it first gets written approval from the Commission.

Selling, transferring, charging, or otherwise disposing of a significant interest in an insurance business, or acquiring one, needs prior written approval from the Commission.

An insurer may not appoint a director or principal officer unless the Commission has given prior written approval.

If an insurer ends a director’s or senior manager’s appointment, it must notify the Commission in writing within 14 days.

An insurer must not publish or issue a document stating authorised capital or subscribed capital unless the required additional capital amounts are also shown.

An insurer must not pay commission to an insurance intermediary that is not licensed under the Act.

Insurers must get reinsurance arrangements approved by the Commission, use local insurance capacity before overseas reinsurance, and may be exempted by written notice.

Insurers must file an annual reinsurance statement with the Commission and include copies of every reinsurance agreement referred to in it.

An insurer may not enter into reinsurance contracts unless the arrangement is facultative; insurers licensed only for reinsurance business are exempt.

A long term insurer must always have an actuary whose appointment has been approved in writing by the Commission.

The Commission may revoke an actuary’s appointment if the actuary has failed to meet obligations under the Act, and the insurer must then appoint a new actuary.

The actuary of a long term insurer may access relevant insurer information or documents and may require directors or employees to answer questions or produce documents. Directors or employees must comply unless they have a reasonable excuse.

An actuary for a long term insurer must report certain suspected contraventions and related matters to the Commission, and must also inform the insurer in some cases.

The actuary of a long term insurer must comply with relevant actuarial standards when performing functions or exercising power.

A long term insurer must have its actuary investigate its financial condition at least once a year, and the actuary must produce a report.

An actuary of a long term insurer may attend directors’ meetings and certain general meetings, and may speak on the matters being considered.

An actuary may report a matter to the Commission if a long term insurer, without reasonable excuse, refuses access to required documents and information or if a director or employee of the insurer breaches section 58(1)(b).

The Commission may require an insurer to have an actuary investigate specified aspects of its financial condition and give the Commission the report. The insurer pays for the report, and the Commissioner may direct who performs the investigation.

Transfers or amalgamations of part of an insurance business need Commission-approved scheme compliance.

A scheme must include the agreement or deed terms, other arrangements needed to carry it out, and any other prescribed information.

The Commission may hold a hearing on an application if it thinks this is necessary.

An insurer may do an arrangement or amalgamation under Part S, but it cannot pass the related liquidation resolution without the Commission’s prior written consent, and the arrangement or amalgamation has no effect unless the Court approves it.

An insurer must keep its capital at or above the required minimum, and must immediately tell the Commission in writing if capital falls below that level.

An insurer’s shares issued on or after the commencement date must be fully paid for in cash, unless the Commission authorises otherwise.

Insurers must keep a solvency margin at least as high as the required minimum and must immediately notify the Commission in writing if it drops below that level.

Insurers must keep required reserves, immediately notify the Commission if reserves fall short, and follow any Commission direction to increase reserves.

The Commission may require insurers or reinsurers to deposit 10% of minimum capital with the Bank of Ghana in Government securities, and may later increase the deposit by notice.

The Commission may authorise return of a deposit to an insurer by notice if it is satisfied there is good reason; otherwise the deposit cannot be returned unless that notice is issued. If the insurer is in liquidation or judicial management, the court may order return to the liquidator or judicial manager on conditions it thinks appropriate.

An insurer must not make a distribution to a shareholder unless post-distribution capital, solvency margin, and reserves meet the required levels.

Insurers are prohibited from making certain share, lending, credit, and guarantee transactions, subject to a narrow short-term insurer exception and a section 75 distribution exception.

The Commission may approve minimum premium and commission rates by notice, and insurers must follow any notice in force.

An insurer must keep accounting records, retain them for at least six years after the related transaction ends, keep them in the country, and tell the Commission in writing where they are kept.

An insurer must use the same financial year as the Government.

An insurer must prepare annual accounts and lodge them with the Commission within four months after year-end, with specified supporting documents.

An insurer must lodge quarterly accounts and reports with the Commission within six weeks after each quarter ends, together with a prescribed director's certificate.

The Commission may, if an insurer applies, extend compliance time for certain sections for up to one month, with total extensions capped at three months, and may attach conditions.

The Commission may require an insurer to amend or replace a lodged document, and may amend or reject it if the insurer does not comply.

If an insurer belongs to a group of companies, the Commission may require it to lodge group accounts.

An insurer must appoint an auditor and notify the Commission within 14 days; the Commission must approve the appointment unless a stated exception applies.

An insurer’s auditor must send an audit report to the insurer when the audit is finished. The Commission may also require the insurer to provide a further report, and the insurer bears the cost of that report.

An insurer’s auditor must send the Commission the audit report and promptly report serious warning information; if the appointment ends, the auditor must notify the Commission and still send any report or information that would otherwise have been due.

The Commission may revoke an insurer’s auditor approval if the auditor has failed duties or is disqualified, and the insurer must appoint a new auditor; if the insurer does not appoint one, the Commission may appoint a qualified person.

An auditor of a long term insurer may accept certain actuary valuations for an audit, but an external auditor must not rely only on those valuations and must do an independent review and examination.

Sections 78 to 89 do not limit the Companies Code’s accounts and audits rules for insurers, and insurers lodging accounts or financial statements with the Commission must prepare them under the Code unless this Act or the Regulations say otherwise.

An insurer must not be wound up by private liquidation under the Companies Code.

This section says the official liquidation rules in Act 180 are modified for insurers and companies carrying on unlicensed insurance business.

Official winding up of a long term insurer must start by petition to the Court; for a short term insurer it may start by special resolution only with the Commission’s prior written consent. The Commission can also direct publication of a liquidator’s appointment, and failure to comply can trigger a pecuniary penalty.

The Commission may apply to the Court to liquidate an insurer or an unlicensed insurance business company, and the Court may order liquidation on specified grounds.

If someone other than the Commission presents a petition for an insurer’s official liquidation, the petition must be served on the Commission, and the Commission may appear and be heard at the hearing.

If the Court is hearing a petition to officially liquidate an insolvent insurer, it may instead reduce the insurer’s contracts on terms it considers just.

A liquidator must continue a long-term insurer’s business unless the Court orders otherwise, and the insurer must not issue new insurance contracts.

In a long term insurer’s official liquidation, the insurer’s long term fund assets must be used first to pay long term liabilities tied to those funds.

The Court may make a judicial management order for an insurer if this is in policyholders’ interests, and the insurer is then managed by a judicial manager under the court’s control.

The insurer or the Commission may apply for a judicial management order, and both may be heard on the application.

While a judicial management order is in force for an insurer, enforcement, repossession, court process, share transfers, changes to member status, and members' resolutions are barred unless the Court grants leave or the judicial manager consents.

When a judicial management order is made, the Court must appoint a qualified and experienced judicial manager, who must manage the insurer’s business and control its assets within the appointed scope.

The court may give a judicial manager extra duties and directions, and a judicial manager must not issue or enter into policies unless the Court gives leave.

A judicial manager has broad powers to act for the company, unless the Court orders otherwise.

The judicial manager must give the Commission information it requires from time to time and notice of any application made to court.

The Commission and the judicial manager may appear and be heard in court applications about an insurer’s judicial management, including applications to discharge the order.

The judicial manager can be paid remuneration and reimbursed reasonable costs and expenses, with the court fixing the amount.

On application by the insurer or the Commission, the Court may remove a judicial manager and appoint a suitably qualified replacement to fill the vacancy.

The judicial manager, the Commission, or another interested person may ask the court to discharge a judicial management order, and the court may do so if the order’s purpose is fulfilled or it should not stay in force.

A judicial manager must file a report with the court soon after appointment, recommend the best course for policy-holders, give reasons, send a copy to the Commission, and ask the Court for an order to implement the recommendations.

The Court may make an order on an application under section 110(3)(b) if it thinks the order is most advantageous to the insurer’s policyholders.

If the Court orders a transfer of an insurer’s business, the judicial manager must prepare a transfer scheme. Until the Court confirms the scheme, the insurer’s management stays vested in the judicial manager.

A judicial manager is protected from liability to any person for good-faith acts or omissions done while carrying out powers or duties given by the Act or by the court.

A person may apply to the Commission for an insurance intermediary licence, but the application must be in writing and include the required details, documents, and fee.

The Commission may issue an insurance intermediary’s licence, and it can attach conditions. An applicant must satisfy the stated fit-and-proper and compliance requirements to qualify.

A licence issued under subsection (1) must be in writing and must state its category and any applicable conditions and authorisations.

Only a company or partnership may be granted an insurance broker or insurance loss adjuster licence, and certain connected persons of an insurance broker cannot get licences as an insurance agent, sub-agent, or loss adjuster.