Insurance Act — Part 1 | Cap. 487 — Kenya law | Esheria

Insurance Act

Part 1 of 2 · provisions 1–200

This Act may be cited as the Insurance Act.

Jurisdiction
Kenya
Instrument
Act or statute
Citation
Cap. 487
Version
11 Dec 2023
Language
en
Official source
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Complete work
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Source attribution: Source: Kenya Law

Statute overview

About this statute

This Act may be cited as the Insurance Act. An insurer is treated as carrying on a particular class of insurance business while any liability for that class remains unsatisfied. The Commissioner may, with Board approval, direct an insurer who has not issued a new long-term policy for twelve months to propose transfer or amalgamation; the Commissioner may frame transfer schemes, order investigations, or apply to the High Court; disposing or misappropriating closed fund assets is an offence with fines or imprisonment and refund obligations. An investigator may investigate affairs of associated persons for a section 9 investigation with the Board's written consent; before starting, the investigator must, if requested, serve a copy of that consent on the associated person. Investigators may require persons (including companies, bodies, associations, funds and natural persons) to assist, appear for examination and produce books; investigators may take and copy produced documents; refusing, giving false information, or obstructing is an offence punishable by a fine up to two thousand shillings; those examined must answer questions and, if they claim self-incrimination before answering, the question and answer are inadmissible in criminal proceedings except for the subsection (4) offence.

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Legal text

Provisions of Insurance Act

Showing 200 of 254

Part I

PRELIMINARY

  1. 1

    PRELIMINARY - 1. Short title

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    This Act may be cited as the Insurance Act.

    Section 1. Short title Section This Act may be cited as the Insurance Act.
  2. 2

    PRELIMINARY - 2. Interpretation

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    An insurer is treated as carrying on a particular class of insurance business while any liability for that class remains unsatisfied.

    Section 2. Interpretation Section 2(1) In this Act, unless the context otherwise requires— "actuary" means— (a) a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or (b) such other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") having actuarial knowledge as the Commissioner ("the officer appointed under;") may, on the application of a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") , approve; "admitted asset" deleted by ActNo. 22 of 2017, s. 2(a) ; "admitted liability" deleted by ActNo. 22 of 2017, s. 2(a) ; "Advisory Board" deleted by ActNo. 11 of 2006, s. 2(a) ; "affairs" , in relation to a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or to a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") associated with another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , includes— (a) the promotion, formation, membership, control, trading, dealings, business and property of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; (b) the ownership of shares in, debentures of and interests made available by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; (c) matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or are or have been able to control or to influence materially the policy of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; and (d) the circumstances under which a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; "agent" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , not being a salaried employee of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who, in consideration of a commission, solicits or procures insurance business for an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") ; "appointed date" means the date specified in section 1 for the coming into force of this Act; "assessment report" means any report in respect of a claim; "asset" includes any property, security, item or interest of a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; "auditor" has the meaning assigned to it under section 3(1) of the Companies Act ( Cap. 486 ); "Authority" means the Insurance Regulatory Authority established by section 3 ; "bank" has the meaning assigned to it in the Banking Act ( Cap. 488 ); "Board" means the Board of Directors of the Authority ("the Insurance Regulatory Authority established by;") constituted under section 3B ; "bond investment business" deleted by ActNo. 28 of 2019, s. 2(a)(i) ; "broker" means an intermediary ("a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;") involved with the placing of insurance business with an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") for or in expectation of payment by way of brokerage commission for or on behalf of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , policyholder or proposer for insurance or reinsurance and includes a medical insurance provider ("an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;") ; "Cabinet Secretary" means the Cabinet Secretary for the time being responsible for the National Treasury; "capital adequacy ratio" means a measure of the available capital in relation to the required capital; "certified" means certified by a principal officer ("an officer appointed under;") to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") to be certified; " Chairperson" means the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") for the time being presiding over the Board ("the Board of Directors of the Authority constituted under;") of Directors or other governing body of the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") ; "child’s advancement policy" means a policy effected, before a child has attained the age of eighteen years, by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") other than the child, which contains both of the following provisions— (a) provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age ; (b) provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age ; "claims settling agent" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya; "Commissioner" means the officer appointed under section 3E ; "Company" means the Kenya Reinsurance Corporation Limited ; "contract of insurance" includes a contract of reinsurance; "Corporation" repealed by ActNo. 7 of 1997, s. 13 ; "court" means the High Court; "dependent" , in relation to a company, means— (a) that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or (b) that the first-mentioned company is a dependent of a company which is that other company’s dependent; "director" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") occupying the position of a director by whatever name he may be called; "document" includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form; "financial institution" has the meaning assigned to it in the Banking Act ( Cap. 488 ) and includes a mortgage finance company within the meaning of that Act; "financial year" means the calendar year; "general insurance business" means insurance business of any class or classes not being long term insurance business ; "gross direct premium" means the premium ("the consideration for the granting of an annuity;") after deductions of discounts, refunds and rebates of premium ("the consideration for the granting of an annuity;") written by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") excluding any reinsurance premium ("the consideration for the granting of an annuity;") accepted and before deduction of— (a) any premium ("the consideration for the granting of an annuity;") payable in respect of mandatory cessions falling under section 145 of this Act; (b) any other reinsurance premium ("the consideration for the granting of an annuity;") ceded; "gross liability" means liability before deducting any part of it which is re-insured; "gross premium" means the premium ("the consideration for the granting of an annuity;") after deduction of discounts, refunds and rebates of premium ("the consideration for the granting of an annuity;") but before deduction therefrom of any premium ("the consideration for the granting of an annuity;") paid or payable by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for reinsurance ceded, and includes premiums receivable by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under reinsurance contracts accepted by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; "group life insurance and group business" means insurance on the lives of groups of persons formed for purposes other than that of purchasing a group life insurance policy ; "index-based insurance" means an insurance contract— (a) under which the liability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to make a payment to the policyholder is triggered by, and the amount of that payment is determined in accordance with, one or more indices, rather than on an assessment of the policyholder's actual loss; and (b) where the payment is designed to provide a level of compensation, although not necessarily an indemnity, to the policyholder in respect of either or both of the following— (i) losses, including consequential losses, that the policyholder is expected to suffer; or (ii) costs, including mitigation costs, that the policyholder is expected to incur, in the event that payment is triggered by the index; "industrial life assurance business" deleted by ActNo. 28 of 2019, s. 2(a) (ii) ; "insurance business" means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes— (a) the effecting and carrying out by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") effecting them) in return for the payment of one or more premiums; (b) the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts; (c) the effecting and carrying out of contracts to pay annuities on human life; (d) takaful insurance business based on group participation guaranteeing each of the members against defined loss or damage; (e) micro-insurance business ; (f) social insurance schemes; and any business incidental to insurance business as so defined but does not include— (i) business in relation to the benefits provided by a friendly society or trade union for its members or their dependants; (ii) business in relation to the benefits provided for its members or their dependants by an association of employees; (iii) deleted by ActNo. 9 of 2003, s. 2 ; (iv) business in relation to a scheme or arrangement for the provision of benefits consisting of— (A) the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or (B) deleted by ActNo. 9 of 2003, s. 2 , and no other benefits, except benefits incidental to the scheme or arrangement; (v) business consisting of the effecting and carrying out, by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") carrying on no other insurance business , of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind; (vi) business declared by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") by notice in the Gazette not to be insurance business for the purposes of this Act; "insurance group" includes a registered insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and its a subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") , or an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") 's holding company, whether operating or non-operating, and its subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") ; "insurance surveyors" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business , includes a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who surveys or assesses the losses on behalf of the insured; "Insurance Training and Education Trust" means the Insurance Training and Education Trust declared as such by instruments of the trustees dated 3rd May, 1988; "Insurance Training Levy" means the insurance training levy payable under section 197H ; "Insurance Premium Levy" means the insurance premium ("the consideration for the granting of an annuity;") levy payable under section 197A ; "insurer" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , registered under this Act, who carries on insurance business and includes a reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") ; "intermediary" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , but does not include a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who merely publishes invitations on behalf of, or to the order of, some other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; "investigator" means the Commissioner ("the officer appointed under;") or an investigator appointed under section 9 ; "Kenya business" and "Kenya reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") " means insurance business carried on by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, including marine cargo insurance policies for commercial imports, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence; "Kenya Government securities" means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government; "Kenya Reinsurance Corporation" repealed by ActNo. 7 of 1997, s. 13 ; "Kenya Reinsurance Corporation Limited" has the meaning assigned to it in section 2 of the Kenya Reinsurance Corporation Act ( Cap. 487A ); “licensing” means authorization under this Act to transact insurance business and includes renewal of licenses; "life assurance" and "life assurance business" mean the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life; "long term insurance business" includes insurance business of all or any of the following classes— (a) life assurance ; (b) annuities; (c) pensions (personal pension or deposit administration); (d) group life; (e) group credit; (f) permanent health; (g) investment (unit link and linked investments or non-linked investments), and includes, in relation to any insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , business carried on by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") as incidental to any such class of insurance business ; "loss adjuster" and "loss assessor" mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or the insured; "management expenses" means expenses incurred in the administration of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") which are not commission payable and, in the case of general insurance business ("insurance business of any class or classes not being long term insurance business;") , are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding; "managing agent" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , firm or company entitled to the management of the whole affairs of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , by virtue of an agreement with the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , firm or company occupying that position, by whatever name called; "medical insurance provider" means an intermediary ("a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;") , other than a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , concerned with the placing of medical insurance business with an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for, or in expectation of, payment by way of a commission, fee or other remuneration; "micro-insurance business" means insurance that is accessed by or accessible to the low income population, including the underserved markets provided by a variety of different entities and managed in accordance with generally accepted insurance principles; "member of the insurance industry" includes an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") , broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") , insurance surveyor, risk manager ("a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;") , loss assessor, loss adjuster and claims settling agent ("a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;") , whether registered under this Act or not; "net liability" means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner ("the officer appointed under;") ; "net premium" means the balance of the gross premium ("the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;") after deduction therefrom of any premium ("the consideration for the granting of an annuity;") paid or payable by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for reinsurance ceded; "non-operating holding company" means a company, other than the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , which has control of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and whose activities are limited to— (a) holding investments in its subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") ; (b) holding property used by group members; (c) raising funds to— (i) invest in, or to provide support to its subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") ; (ii) conduct its own activities; (iii) provide administrative functions to; (iv) support risk management; and (v) provide financial services for efficient operation of the group. "ordinary life assurance business" means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies; "ordinary life policy" means a policy of life assurance other than a policy of industrial life assurance ; "person" includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme; "policy" — (a) in relation to ordinary life assurance business ("life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies;") or industrial life assurance business , includes an instrument evidencing a contract to pay an annuity upon human life; (b) in relation to bond investment business , includes a bond, certificate, receipt or other instrument evidencing the contract with insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; and (c) in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue; "policy-holder" means the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who for the time being is the legal holder of the policy for securing the contract with the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; "premium" includes the consideration for the granting of an annuity; "principal officer" means an officer appointed under section 68 ; "registration" deleted by ActNo. 10 of 2023, Sch. "regulations" and "rules" mean regulations and rules made under this Act; "reinsurer" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who carries on reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") and includes a retrocessionaire ("a person reinsuring a reinsurer;") ; "reinsurance business" means the business of undertaking liability to pay money to insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") and includes a retrocession ("the reinsurance of reinsurance business accepted by a reinsurer;") ; "related" , in relation to an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , means— (a) a dependant of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; (b) a company of which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is a dependant; or (c) a dependant of a company of which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is a dependant; "retrocession" means the reinsurance of reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") accepted by a reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") ; "retrocessionaire" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") reinsuring a reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") ; "risk manager" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means; "significant owner" means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who directly or indirectly holds more than ten percent of the controlling or beneficial interest in a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licenced under this Act; "statutory fund" means the fund established under section 45 ; "subsidiary" means a subsidiary company as defined by section 4 of the Companies Act ( Cap. 486 ); "tax" deleted by ActNo. 11 of 2006, s. 2(b) ; "Tribunal" means the tribunal established under section 169 ; "vesting age" means— (a) the age of eighteen years; or (b) an age of not less than ten years on or after the attainment of which by the child it is specified in the policy that sums payable in respect of the policy by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who issued it shall be paid to the child or his executors, administrators or assigns. Section 2(2) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business remains unsatisfied and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specifically provided in any other section thereof, in relation to that class of business. [Act No. 18 of 1986 , Sch., Act No. 12 of 1987 , s. 2, Act No. 9 of 1989 , Second Sch., Act No. 20 of 1989 , Sch., Act No. 7 of 1997 , s. 13, Act No. 4 of 1999 , s. 72, Act No. 9 of 2003 , s. 2, Act No. 11 of 2006 , s. 2, Act No. 57 of 2012 , s. 31, Act No. 1 of 2014 , s. 2, Act No. 14 of 2015 , Act No. 19 of 2015 , s. 31, Act No. 50 of 2016 , s. 2, Act No. 11 of 2017 , Sch., Act No. 22 of 2017 , s. 2, Act No. 11 of 2019 , s. 2, Act No. 28 of 2019 , s. 2 (a)(b), Act No. 8 of 2021 , s. 55, Act No. 10 of 2023 , Sch.]

Part II

THE INSURANCE REGULATORY AUTHORITY

  1. 10

    THE INSURANCE REGULATORY AUTHORITY - 10. Particular powers ofCommissionerwith regard tolong term insurance business

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    The Commissioner may, with Board approval, direct an insurer who has not issued a new long-term policy for twelve months to propose transfer or amalgamation; the Commissioner may frame transfer schemes, order investigations, or apply to the High Court; disposing or misappropriating closed fund assets is an offence with fines or imprisonment and refund obligations.

    Section 10. Particular powers ofCommissionerwith regard tolong term insurance business Section 10(1) Where an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on long term insurance business has not issued a new policy of that category of insurance for a period of twelve months from the appointed date ("the date specified infor the coming into force of this Act;") , or from the date of issue of the last policy , whichever is later, the Commissioner ("the officer appointed under;") may, with the approval of the Board ("the Board of Directors of the Authority constituted under;") , direct the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to frame proposals for transfer or amalgamation of its business to or with another insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 10(2) Where an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") fails to comply with a direction under subsection (1), or if the proposals framed by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") are in the opinion of the Commissioner ("the officer appointed under;") unsatisfactory, the Commissioner ("the officer appointed under;") may himself frame a scheme for the transfer of the business to another insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") specified by the first-mentioned insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and approved by the Commissioner ("the officer appointed under;") . Section 10(3)(a) order an investigation of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 10(3)(b) apply to the court ("the High Court;") for winding up the business of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in terms of section 123 (1)(b). Section 10(4) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who, upon an investigation ordered under subsection (3)(a) is found to have disposed of any assets from a closed fund contrary to the provisions of section 21A , or to have misappropriated such assets, commits an offence and is liable on conviction, to a fine not exceeding one hundred thousand shillings or, where the insurer is a natural person to imprisonment for a term not exceeding five years, or to both. Section 10(5) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") convicted under subsection (4) shall forthwith be liable to refund the assets misappropriated from the closed fund. Section 10(6) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who fails to refund any assets under subsection (5) commits an offence and is liable on conviction to a fine not exceeding one hundred thousand shillings, or, if the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is a natural person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , to imprisonment for a term not exceeding five years, or to both. Section 10(7) If an offence under subsection 6 is a continuing one, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be liable to a further fine of five thousand shillings for every day during which the offence continues. Section 10(8) In this section the expression "closed fund" means a closed fund within the meaning of section 21A . [Act No. 12 of 1987 , s. 3, Act No. 12 of 1994 , s. 3, Act No. 8 of 1996 , s. 48, Act No. 11 of 2006 , s. 9, Act No. 22 of 2022 , s. 55.]
  2. 11

    THE INSURANCE REGULATORY AUTHORITY - 11. Investigations of associated persons

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    An investigator may investigate affairs of associated persons for a section 9 investigation with the Board's written consent; before starting, the investigator must, if requested, serve a copy of that consent on the associated person.

    Section 11. Investigations of associated persons Section 11(1) Where an investigator ("the Commissioner or an investigator appointed under;") believes on reasonable grounds that it is necessary for the purposes of an investigation under section 9 to investigate the whole or some part of the affairs of another person that is, or has at some relevant time been, associated with the person in respect of which he is appointed, he may, with the consent in writing of the Board, investigate the whole or that part of the affairs of that other person. Section 11(2) Before commencing the investigation, the investigator ("the Commissioner or an investigator appointed under;") shall, if requested, serve on the associated person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") a copy of the consent in writing of the Board ("the Board of Directors of the Authority constituted under;") . Section 11(3)(a) the first-mentioned person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") is a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") ; and Section 11(3)(b) either of those persons is, or has directors who are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or of its directors.
  3. 12

    THE INSURANCE REGULATORY AUTHORITY - 12. Powers ofinvestigator

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    Investigators may require persons (including companies, bodies, associations, funds and natural persons) to assist, appear for examination and produce books; investigators may take and copy produced documents; refusing, giving false information, or obstructing is an offence punishable by a fine up to two thousand shillings; those examined must answer questions and, if they claim self-incrimination before answering, the question and answer are inadmissible in criminal proceedings except for the subsection (4) offence.

    Section 12. Powers ofinvestigator Section 12(1)(a) give to the investigator ("the Commissioner or an investigator appointed under;") all reasonable assistance in connection with the investigation; or Section 12(1)(b) appear before the investigator ("the Commissioner or an investigator appointed under;") for examination concerning matters relevant to the investigation; or Section 12(1)(c) produce any books or documents that relate to the affairs of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") being investigated. Section 12(2) Where books or documents are produced to an investigator ("the Commissioner or an investigator appointed under;") under this section, the investigator ("the Commissioner or an investigator appointed under;") may take possession of them for such period as he thinks necessary for the purposes of the investigation and may make copies of and take extracts from them, but shall permit a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who would be entitled to inspect any of them, if they were not in the possession of the investigator ("the Commissioner or an investigator appointed under;") , to inspect at all reasonable times such of those books as that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") would be so entitled to inspect. Section 12(3)(a) refuse or fail to comply with a requirement of an investigator ("the Commissioner or an investigator appointed under;") that is applicable to him, to the extent to which he is able to comply with it; or Section 12(3)(b) in purported compliance with such a requirement, furnish information or make a statement that he knows to be false or misleading in a material particular; or Section 12(3)(c) when appearing before an investigator ("the Commissioner or an investigator appointed under;") for examination in pursuance of such a requirement, make a statement that he knows to be false or misleading in a material particular; or Section 12(3)(d) obstruct or hinder an investigator ("the Commissioner or an investigator appointed under;") in the exercise of his powers under this Act. Section 12(4) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who acts in contravention of subsection (3) shall be guilty of an offence and liable to a fine not exceeding two thousand shillings. Section 12(5) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") being examined by an investigator ("the Commissioner or an investigator appointed under;") shall not be excused from answering a question put to him by an investigator ("the Commissioner or an investigator appointed under;") on the ground that the answer might tend to incriminate him but, where the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") informs the investigator ("the Commissioner or an investigator appointed under;") before answering the questions that the answer might tend to incriminate him, neither the question nor the answer shall be admissible in evidence against him in criminal proceedings other than proceedings in relation to an offence under subsection (4).
  4. 13

    THE INSURANCE REGULATORY AUTHORITY - 13. Protection for persons complying

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    A person who complies with a requirement of an investigator under this Act shall not incur liability to any other person solely because of that compliance.

    Section 13. Protection for persons complying Section A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who complies with a requirement of an investigator ("the Commissioner or an investigator appointed under;") under this Act shall not incur liability to any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") by reason only of that compliance.
  5. 14

    THE INSURANCE REGULATORY AUTHORITY - 14. Person may be represented by an advocate

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    Persons may be represented by an advocate; Section may attend the examination.

    Section 14. Person may be represented by an advocate Section may attend the examination; and
  6. 15

    THE INSURANCE REGULATORY AUTHORITY - 15. Notes of examination ofperson

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    Investigators may record examination notes, read them to or by the person, and require the person to sign; a signed copy must be furnished free on written request to the investigator.

    Section 15. Notes of examination ofperson Section 15(1) An investigator ("the Commissioner or an investigator appointed under;") may cause notes of an examination of a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to be recorded and read to or by that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") and may require that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to sign the notes and, subject to section 12 (5), notes signed by that person may be used in evidence in proceedings under this Act against that person. Section 15(2) A copy of the notes signed by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall be furnished without charge to that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") upon request made by him in writing to the investigator ("the Commissioner or an investigator appointed under;") . Section 15(3) Where notes are recorded under this section, the notes shall be furnished to the Commissioner ("the officer appointed under;") with the report of the investigation to which they relate.
  7. 16

    THE INSURANCE REGULATORY AUTHORITY - 16. Report ofinvestigator

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    Investigators may make written reports to the Commissioner during investigations; if directed in writing they must make specified reports. Investigators must not recommend criminal prosecution or state that a person has committed an offence. The Commissioner must give the investigated person a copy of the report. The Cabinet Secretary may publish the report or part of it if in the public interest and after considering advice from the Attorney-General.

    Section 16. Report ofinvestigator Section 16(1) An investigator ("the Commissioner or an investigator appointed under;") may make one or more reports in writing to the Commissioner ("the officer appointed under;") during the investigation of the whole or a part of the affairs of a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") and shall, if so directed in writing by the Commissioner ("the officer appointed under;") , make such reports as are specified in the direction. Section 16(2)(a) a statement of the opinion of the investigator ("the Commissioner or an investigator appointed under;") in relation to the grounds for investigation and the facts on which that opinion is based and recommendations thereon; Section 16(2)(b) the question whether the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") investigated should continue to be permitted to carry on business; Section 16(2)(b)(i) the question whether the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") investigated should continue to be permitted to carry on business; Section 16(2)(b)(ii) any directions that should be given under section 17 to the person investigated; Section 16(2)(b)(iii) the question whether the affairs of the investigated person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") should be reorganized; and Section 16(2)(b)(iv) such other matters, affecting the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") investigated or otherwise in the public interest in relation to the business carried on by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") investigated, as he thinks fit. Section 16(3) An investigator ("the Commissioner or an investigator appointed under;") shall not include in a report a recommendation relating to the institution of criminal proceedings or a statement to the effect that, in his opinion, a specified person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") has committed a criminal offence. Section 16(4) The Commissioner ("the officer appointed under;") shall give a copy of a report made to him under this section to the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") investigated. Section 16(5) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may, if he considers it is in the public interest to do so and after taking into consideration any advice he has received from the Attorney- General, cause the whole or some part of the report to be published. [Act No. 19 of 2015 , s. 33.]
  8. 17

    THE INSURANCE REGULATORY AUTHORITY - 17. Directions topersoninvestigated

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    The Commissioner may, by written notice, require a person under investigation to comply with directions related to matters from a report made under section 16; the Commissioner may specify prohibitions or requirements for an insurer (for example, not to issue or renew policies, to dispose of or retain assets, to make account provisions, adjust reserves, arrange reinsurance, increase capital, enter sale or reconstruction arrangements) and may order forfeiture of security in certain circumstances.

    Section 17. Directions topersoninvestigated Section 17(1) The Commissioner ("the officer appointed under;") may, by notice in writing, require a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") investigated to comply by such date or within such period as may be specified therein, with such directions as he considers necessary in connection with any matter arising out of a report made under section 16 . Section 17(2)(a) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not issue new policies or undertake liability under new contracts of insurance; Section 17(2)(b) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not renew existing policies; Section 17(2)(c) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not issue policies in respect of a class of insurance business specified in the direction or undertake liability under contracts of insurance included in a class of contracts of insurance so specified; Section 17(2)(d) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not renew existing policies in respect of a class of insurance business specified in the direction. Section 17(3)(a) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not dispose of or otherwise deal with an asset ("any property, security, item or interest of a person;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or an asset ("any property, security, item or interest of a person;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") included in a class of assets specified in the direction; Section 17(3)(b) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall dispose of an asset ("any property, security, item or interest of a person;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") included in a class of assets specified in the direction, in such manner and within such period after the giving of the direction, not being less than twenty- one days, as the Commissioner ("the officer appointed under;") so specifies; Section 17(3)(c) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, within such period after the giving of the direction, not being less than twenty-one days, as the Commissioner ("the officer appointed under;") specifies in the direction, make in his accounts such provision or further provision as the Commissioner ("the officer appointed under;") so specifies in respect of unearned premiums or claims or in respect of both unearned premiums and claims; Section 17(3)(d) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, within such period after the giving of the direction, not being less than twenty-one days, as the Commissioner ("the officer appointed under;") specifies in the direction, adjust one or more of his reserves and make appropriate investment in connection with such reserve or reserves, as the case may be; Section 17(3)(e) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall make such arrangements with respect to reinsurance or retrocession ("the reinsurance of reinsurance business accepted by a reinsurer;") as he so specifies; Section 17(3)(f) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall increase, so far as he is able to do so, his paid up capital whether by calling up such uncalled capital as is available to be called up or otherwise; Section 17(3)(g) enter into an arrangement or agreement for the sale or disposal of his business by amalgamation or otherwise or for the carrying on of his business in partnership with another body corporate; or Section 17(3)(g)(i) enter into an arrangement or agreement for the sale or disposal of his business by amalgamation or otherwise or for the carrying on of his business in partnership with another body corporate; or Section 17(3)(g)(ii) effect a reconstruction of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 17(3)(h) that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, within such period after the giving of the directions, not being less than six months, as the Commissioner ("the officer appointed under;") specifies in the direction, effect a reconstruction of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 17(4) If a body corporate in respect of whom a direction has been given under subsection (1), (2) or (3) is placed in liquidation, the direction ceases to have effect unless the court ("the High Court;") directs otherwise. Section 17(5)(a) as a result of a report by an investigator ("the Commissioner or an investigator appointed under;") , the Commissioner ("the officer appointed under;") considers that it would be in the interests of policy holders for the body to be placed in liquidation; or Section 17(5)(b) the body has failed, or is failing, to comply with a direction issued under this section, Section 17(6) Where, after reading a report made under section 16 , the Commissioner considers that a requisition under paragraphs (b) or (c) of subsection (1) of section 9 has been made without reasonable cause, he may order that the whole or any part of the amount furnished as security under subsection (3) of that section shall be forfeited and paid to the person investigated and the Commissioner in order to defray the respective costs incurred by them. [Act No. 19 of 2015 , s. 34, Act No. 11 of 2019 , s. 4.]
  9. 18

    THE INSURANCE REGULATORY AUTHORITY - 18. Secrecy

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    Persons covered by this section must not record, divulge or communicate information about another person's affairs except when performing duties under this Act; limited disclosures are permitted when authorised by the Commissioner or when the Cabinet Secretary considers it in the public interest.

    Section 18. Secrecy Section 18(1) This section applies to every person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who is or has been the Commissioner ("the officer appointed under;") of Insurance or a member of the staff assisting the Commissioner ("the officer appointed under;") or an investigator ("the Commissioner or an investigator appointed under;") or any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") appointed by or assisting the Commissioner ("the officer appointed under;") . Section 18(2) Subject to this section, a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to whom this section applies shall not, either directly or indirectly, except in the performance of a duty under or in connection with this Act, make a record of or divulge or communicate to any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , any information concerning the affairs of any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") acquired by him by reason of his office or employment under or for purposes of this Act. Section 18(3) Nothing in this section shall prevent the communication of information or the production of a document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") , by the Commissioner ("the officer appointed under;") or by a member of the staff or other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") assisting the Commissioner ("the officer appointed under;") or by an investigator ("the Commissioner or an investigator appointed under;") authorized by the Commissioner ("the officer appointed under;") in that behalf, to a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to whom, in the opinion of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") , it is in the public interest that the information be communicated or the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") produced. Section 18(4) The Commissioner ("the officer appointed under;") or a member of the staff or other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") assisting the Commissioner ("the officer appointed under;") and authorized by him in that behalf may furnish to the Director of Statistics or to a regulatory authority information obtained from a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") or policy-holder : Provided that any information furnished to the Director of Statistics or to a regulatory authority under this subsection shall be treated as confidential and used solely for the purposes of this Act. Section 18(5) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes the provisions of this section shall be guilty of an offence and liable to a fine not exceeding ten thousand shillings or imprisonment for a term not exceeding twelve months or to both. [Act No. 12 of 1994 , s. 4, Act No. 57 of 2012 , s. 34.]
  10. 3

    THE INSURANCE REGULATORY AUTHORITY - 3. Establishment of theAuthority

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    An Authority called the Insurance Regulatory Authority is established and given corporate powers including suing and being sued, acquiring and disposing of property, borrowing or lending money, and performing acts necessary for its functions.

    Section 3. Establishment of theAuthority Section 3(1) There is established an Authority ("the Insurance Regulatory Authority established by;") to be known as the Insurance Regulatory Authority ("the Insurance Regulatory Authority established by;") . Section 3(2)(a) suing and being sued; Section 3(2)(b) taking, purchasing or otherwise acquiring, holding, charging or disposing of movable or immovable property; Section 3(2)(c) borrowing or lending money; and Section 3(2)(d) doing or performing all other things or acts for the furtherance of its functions under the provisions of this Act, which may be lawfully done or performed by a body corporate.
  11. 3A

    THE INSURANCE REGULATORY AUTHORITY - 3A. Objects and functions of theAuthority

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    The Insurance Regulatory Authority must publish standards it formulates and may provide for punishment (a fine up to five million shillings or imprisonment up to five years, or both) for persons who contravene those standards.

    Section 3A. Objects and functions of theAuthority Section 3A(1)(a) ensure the effective administration, supervision, regulation and control of insurance and reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") in Kenya; Section 3A(1)(b) formulate and enforce standards for the conduct of insurance and reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") in Kenya; Section 3A(1)(c) license all persons involved in or connected with insurance business , including insurance and reinsurance companies, insurance and reinsurance intermediaries, loss adjusters and assessors, risk surveyors and valuers; Section 3A(1)(d) deleted by ActNo. 1 of 2014, s. 3 ; Section 3A(1)(e) deleted by ActNo. 1 of 2014, s. 3 ; Section 3A(1)(f) advise the Government on the national policy to be followed in order to ensure adequate insurance protection and security for national assets and national properties; Section 3A(1)(g) issue supervisory guidelines and prudential standards from time to time, for the better administration of the insurance business of persons licensed under this Act; Section 3A(1)(h) educate the public regularly on the right to independently select an underwriter or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") from a list of underwriters or brokers licensed by the Authority ("the Insurance Regulatory Authority established by;") ; Section 3A(1)(h)(ha) educate the public regularly on the right to independently select an underwriter or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") from a list of underwriters or brokers licensed by the Authority ("the Insurance Regulatory Authority established by;") ; Section 3A(1)(h)(hb) regulate the business of bacc assurance offered by banks in the same manner as the ordinary insurance business including capital requirements and disclosures; Section 3A(1)(i) undertake such other functions as may be conferred on it by this Act or by any other written law. Section 3A(2)(a) to promote the maintenance of a fair, safe and stable insurance sector; Section 3A(2)(b) to protect the interest of the insurance policyholders and beneficiaries; and Section 3A(2)(c) generally to promote the development of the insurance sector. Section 3A(3) The Authority ("the Insurance Regulatory Authority established by;") shall publish the standards formulated under subsection (1) (b) and may provide for the punishment of a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes any of the standards by a fine not exceeding five million shillings or to imprisonment for a term not exceeding five years or to both such fine and imprisonment. [Act No. 11 of 2006 , s. 4, Act No. 10 of 2010 , s. 51, Act No. 57 of 2012 , s. 32, Act No. 1 of 2014 , s. 3, Act No. 11 of 2017 , Sch.]
  12. 3AA

    THE INSURANCE REGULATORY AUTHORITY - 3AA. Assistance in investigation

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    Section establishes assistance in investigation: assistance may be provided where it is desirable in the public interest or will assist a regulatory body; requesting parties may be required to pay the Insurance Regulatory Authority's costs and to be willing to provide reciprocal assistance; and the Authority may co-operate or co-ordinate with other regulatory bodies so long as that is not contrary to the Act's objectives.

    Section 3AA. Assistance in investigation Section 3AA(1)(a) are enforced or administered by that regulatory body; or Section 3AA(1)(b) relate to insurance transactions regulated by that regulatory body, Section 3AA(2) For the purposes of subsection (1), the provisions of this Act shall, with such modifications as may be necessary, apply and have effect as if the contravention of the legal or regulatory requirement referred to in subsection (1) were an offence under this Act. Section 3AA(3)(a) it is desirable or expedient that the assistance requested should be provided in the interest of the public; or Section 3AA(3)(b) the assistance shall assist the regulatory body in the discharge and performance of its functions. Section 3AA(4)(a) pay the Authority ("the Insurance Regulatory Authority established by;") any of the costs and expenses incurred in providing the assistance; and Section 3AA(4)(b) be able and willing to provide reciprocal assistance within its jurisdiction in response to a similar request for assistance from Kenya. Section 3AA(5) Nothing in this section shall be construed as limiting the powers of the Authority ("the Insurance Regulatory Authority established by;") to co-operate or co-ordinate with any other regulatory body in the exercise of its powers under this Act, in so far as any such co-operation or co-ordination is not contrary to the objectives of this Act. [Act No. 1 of 2014 , s. 4.]
  13. 3B

    THE INSURANCE REGULATORY AUTHORITY - 3B.Boardof Directors

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    Sets the Board composition of the Insurance Regulatory Authority and requires the chairperson and certain appointed members to be appointed from persons with knowledge or experience in insurance, finance, banking or actuarial science.

    Section 3B.Boardof Directors Section 3B(1)(a) a Chairperson ("the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;") to be appointed by the President on the recommendation of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") ; Section 3B(1)(b) the Commissioner ("the officer appointed under;") of Insurance appointed under section 3E ; Section 3B(1)(c) the Principal Secretary in the Ministry for the time being responsible for matters relating to finance or his representative; Section 3B(1)(d) the Chief Executive Officer of the Retirement Benefits Authority ("the Insurance Regulatory Authority established by;") ; Section 3B(1)(e) the Chief Executive Officer of the Capital Markets Authority ("the Insurance Regulatory Authority established by;") ; Section 3B(1)(f) the Governor of the Central Bank of Kenya or his representative; Section 3B(1)(g) a nominee of the Insurance Institute of Kenya; and Section 3B(1)(h) four other members, not being public officers, appointed by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") . Section 3B(2) The chairperson and every member appointed under paragraph (a), (g) or (h) of subsection (1) shall be appointed from amongst persons who have knowledge or experience in matters relating to insurance, finance, banking or actuarial science. Section 3B(3)(a) has at any time been convicted of any offence involving fraud, theft, dishonesty, breach of trust or moral turpitude; Section 3B(3)(b) was previously involved in the management or administration of a financial institution which was deregistered, wound up or placed under statutory management for any failure on the part of the management or the administration thereof; Section 3B(3)(c) is a director ("a person occupying the position of a director by whatever name he may be called;") , officer, employee or shareholder of any insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , insurance agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") or any other member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") ; or Section 3B(3)(d) is disqualified under any other written law from holding public office or being a director ("a person occupying the position of a director by whatever name he may be called;") of any institution.
  14. 3C

    THE INSURANCE REGULATORY AUTHORITY - 3C. Powers of theBoard

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    Section 3C grants the Board of Directors of the Insurance Regulatory Authority several powers including controlling and administering assets, setting provisions for expenditure and reserves, receiving and disbursing grants/donations, associating with other bodies, opening bank accounts, investing surplus funds, regulating its procedure (subject to the First Schedule), and delegating powers by resolution.

    Section 3C. Powers of theBoard Section 3C(1)(a) control, supervise and administer the assets of the Authority ("the Insurance Regulatory Authority established by;") in such manner and for such purposes as best promote the purpose for which the Authority ("the Insurance Regulatory Authority established by;") is established; Section 3C(1)(b) determine the provisions to be made for capital and recurrent expenditure and for the reserves of the Authority ("the Insurance Regulatory Authority established by;") ; Section 3C(1)(c) receive any grants, gifts, donations or endowments on behalf of the Authority ("the Insurance Regulatory Authority established by;") and make legitimate disbursements therefrom; Section 3C(1)(d) enter into association with such other bodies or organisations, within or outside Kenya, as it may consider desirable or appropriate and in furtherance of the purpose for which the Authority ("the Insurance Regulatory Authority established by;") is established; Section 3C(1)(e) open a banking account or banking accounts for the funds of the Authority ("the Insurance Regulatory Authority established by;") ; and Section 3C(1)(f) invest the funds of the Authority ("the Insurance Regulatory Authority established by;") not currently required for its purposes in the manner provided in this Act. Section 3C(2) The conduct and regulation of the business and affairs of the Board ("the Board of Directors of the Authority constituted under;") shall be as provided in the First Schedule, but subject thereto, the Board ("the Board of Directors of the Authority constituted under;") may regulate its own procedure. Section 3C(3) The Board ("the Board of Directors of the Authority constituted under;") may, by resolution either generally or in any particular case, delegate to any committee of the Board ("the Board of Directors of the Authority constituted under;") or to any member, officer, employee or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") of the Authority ("the Insurance Regulatory Authority established by;") , the exercise of any of the powers, or the performance of any of the functions or duties of the Authority ("the Insurance Regulatory Authority established by;") under this Act, or under any other written law. [Act No. 11 of 2006 , s. 4.]
  15. 3D

    THE INSURANCE REGULATORY AUTHORITY - 3D. Remuneration ofBoardmembers

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    The Authority must pay Board members such remuneration, fees or allowances for expenses as it determines, in consultation with the Cabinet Secretary for the National Treasury.

    Section 3D. Remuneration ofBoardmembers Section The Authority ("the Insurance Regulatory Authority established by;") , in consultation with the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") , shall pay the members of the Board ("the Board of Directors of the Authority constituted under;") such remuneration, fees or allowances for expenses as it may determine. [Act No. 11 of 2006 , s. 4.]
  16. 3E

    THE INSURANCE REGULATORY AUTHORITY - 3E.Commissionerof Insurance

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    Creates a Commissioner of Insurance as the Authority's CEO appointed by the Board, who manages day-to-day affairs, is an ex officio non‑voting Board member, must meet specified qualifications, serves a three‑year term and may be re‑appointed for a further three years.

    Section 3E.Commissionerof Insurance Section 3E(1) There shall be a Commissioner ("the officer appointed under;") of Insurance who shall be the Chief Executive Officer of the Authority ("the Insurance Regulatory Authority established by;") and who shall be appointed by the Board ("the Board of Directors of the Authority constituted under;") , through an open and competitive process, on such terms and conditions of service as may be determined by the Board ("the Board of Directors of the Authority constituted under;") in the instrument of appointment. Section 3E(2) The Commissioner ("the officer appointed under;") shall be an ex officio member of the Board ("the Board of Directors of the Authority constituted under;") but shall have no right to vote at any meeting of the Board ("the Board of Directors of the Authority constituted under;") . Section 3E(3) The Commissioner ("the officer appointed under;") shall, subject to the directions of the Board ("the Board of Directors of the Authority constituted under;") , be responsible for the day-to-day management of the affairs of the Authority ("the Insurance Regulatory Authority established by;") . Section 3E(4)(a) has satisfied the requirements of Chapter Six of the Constitution; Section 3E(4)(b) holds at least a postgraduate degree in insurance, audit, accounting, finance, actuarial science, business studies or banking; Section 3E(4)(c) is a member of a professional body recognized in Kenya; Section 3E(4)(d) has considerable knowledge, competence and at least ten years’ experience in a managerial capacity in insurance, accounting, finance, actuarial science or banking; and Section 3E(4)(e) is not engaged in the insurance business as a director ("a person occupying the position of a director by whatever name he may be called;") , employee, officer or shareholder of any insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , insurance agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") , or in any other sector of the insurance industry, and if appointed shall be disqualified if he, his spouse or dependent child becomes such director ("a person occupying the position of a director by whatever name he may be called;") , employee, officer or shareholder. Section 3E(5) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") appointed as a Commissioner ("the officer appointed under;") under subsection (1) shall serve for a term of three years and shall be eligible for re-appointment for a further term of three years. Section 3E(6) Spent. [Act No. 11 of 2006 , s. 4, Act No. 1 of 2014 , s. 5.]
  17. 3F

    THE INSURANCE REGULATORY AUTHORITY - 3F. Appointment of Secretary and other staff

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    The Board must appoint a Secretary and may appoint officers or servants as necessary, on terms and conditions it determines.

    Section 3F. Appointment of Secretary and other staff Section 3F(1) The Board ("the Board of Directors of the Authority constituted under;") shall appoint a Secretary to the Board ("the Board of Directors of the Authority constituted under;") on such terms and conditions of service as it may determine. Section 3F(2) The Board ("the Board of Directors of the Authority constituted under;") may appoint such officers or servants as are necessary for the proper discharge of the functions of the Authority ("the Insurance Regulatory Authority established by;") under this Act or any other written law, upon such terms and conditions of service as it may determine. [Act No. 11 of 2006 , s. 4.]
  18. 3G

    THE INSURANCE REGULATORY AUTHORITY - 3G. Common seal of theAuthority

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    The section says the Authority's common seal must be kept in custody as the Board may direct; it must not be used except on the Board's order; and when affixed to a document and duly authenticated it shall be judicially and officially noticed and any necessary Board order is presumed until contrary is proved.

    Section 3G. Common seal of theAuthority Section 3G(1) The common seal of the Authority ("the Insurance Regulatory Authority established by;") shall be kept in such custody as the Board ("the Board of Directors of the Authority constituted under;") may direct, and shall not be used except on the order of the Board ("the Board of Directors of the Authority constituted under;") . Section 3G(2) The common seal of the Authority ("the Insurance Regulatory Authority established by;") , when affixed to a document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") and duly authenticated, shall be judicially and officially noticed, and, unless and until the contrary is proved, any necessary order or authorisation by the Board ("the Board of Directors of the Authority constituted under;") under this section shall be presumed to have been duly given. [Act No. 11 of 2006 , s. 4.]
  19. 4

    THE INSURANCE REGULATORY AUTHORITY - 4. The Insurance RegulatoryAuthorityFund

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    The Authority must establish a general fund called the Insurance Regulatory Authority Fund (the Fund); the Authority may invest Fund moneys in specified securities.

    Section 4. The Insurance RegulatoryAuthorityFund Section 4(1) The Authority ("the Insurance Regulatory Authority established by;") shall establish a general fund to be known as the Insurance Regulatory Authority ("the Insurance Regulatory Authority established by;") Fund, hereafter referred to as "the Fund", which shall vest in the Authority ("the Insurance Regulatory Authority established by;") . Section 4(2)(a) all proceeds of the insurance premium ("the consideration for the granting of an annuity;") levy imposed by section 197A ; Section 4(2)(b) such moneys as may accrue to or vest in the Authority ("the Insurance Regulatory Authority established by;") in the course of the exercise of its powers or the performance of its functions under this Act; Section 4(2)(c) such sums as may be payable to the Authority ("the Insurance Regulatory Authority established by;") pursuant to this Act or any other written law, or pursuant to any gift or trust; Section 4(2)(d) such sums as may be granted to the Authority ("the Insurance Regulatory Authority established by;") by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") pursuant to subsection (3); and Section 4(2)(e) all moneys from any other source provided for, donated to or borrowed by the Authority ("the Insurance Regulatory Authority established by;") . Section 4(3) There shall be made to the Authority ("the Insurance Regulatory Authority established by;") , out of moneys provided by Parliament for that purpose, grants towards the expenditure incurred by the Board ("the Board of Directors of the Authority constituted under;") in the exercise of its powers and the performance of its functions under this Act. Section 4(4) The Authority ("the Insurance Regulatory Authority established by;") may invest any of its funds in securities which trustees are by law allowed to invest trust funds, or in any other securities which the Treasury may, from time to time, approve. Section 4(5) There shall be paid out of the Fund all such sums of money required to defray the expenditure incurred by the Authority ("the Insurance Regulatory Authority established by;") in the exercise of powers and performance of its functions and duties. [Act No. 11 of 2006 , s. 5.]
  20. 4A

    THE INSURANCE REGULATORY AUTHORITY - 4A. Financial year and annual estimates

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    The Board must prepare annual revenue and expenditure estimates months before each financial year and submit them for Cabinet Secretary approval; the Authority may not increase approved estimates without the Cabinet Secretary's consent, and expenditure for the Board must follow approved estimates or a Cabinet Secretary authorisation.

    Section 4A. Financial year and annual estimates Section 4A(1) The financial year ("the calendar year;") of the Authority ("the Insurance Regulatory Authority established by;") shall be the period of twelve months ending on the thirtieth of June in each year. Section 4A(2) At least four months before the commencement of each financial year ("the calendar year;") , the Board ("the Board of Directors of the Authority constituted under;") shall prepare estimates of revenue and expenditure of the Authority ("the Insurance Regulatory Authority established by;") for that year. Section 4A(3)(a) the payment of salaries, allowances and other charges in respect of the staff of the Authority ("the Insurance Regulatory Authority established by;") ; Section 4A(3)(b) the payment of pensions, gratuities and other charges in respect of the retirement benefits which are payable out of the funds of the Authority ("the Insurance Regulatory Authority established by;") ; Section 4A(3)(c) the proper maintenance of the buildings and grounds of the Authority ("the Insurance Regulatory Authority established by;") ; Section 4A(3)(d) the maintenance, repair and replacement of the equipment and other property of the Authority ("the Insurance Regulatory Authority established by;") ; Section 4A(3)(e) the creation of such reserve funds to meet future or contingent liabilities in respect of retirement benefits, insurance or replacement of buildings or equipment, or in respect of such other matter as the Board ("the Board of Directors of the Authority constituted under;") may deem appropriate. Section 4A(4) The annual estimates shall be prepared at least three months before the commencement of the financial year ("the calendar year;") to which they relate and shall be submitted to the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") for approval and after such approval, the Authority ("the Insurance Regulatory Authority established by;") shall not increase the annual estimates without the consent of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") . Section 4A(5) No expenditure shall be incurred for the purposes of the Board ("the Board of Directors of the Authority constituted under;") except in accordance with the annual estimates approved under this section or in pursuance of an authorisation by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") . [Act No. 11 of 2006 , s. 5.]
  21. 4B

    THE INSURANCE REGULATORY AUTHORITY - 4B. Accounts and audit

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    The Authority must keep proper books and records of account, including a statement of income and expenditure for the year and a statement of assets and liabilities as at the last day of the year.

    Section 4B. Accounts and audit Section 4B(1) The Authority ("the Insurance Regulatory Authority established by;") shall cause to be kept all proper books and records of account of the income, expenditure and assets of the Authority ("the Insurance Regulatory Authority established by;") . Section 4B(2)(a) a statement of income and expenditure during that year; and Section 4B(2)(b) a statement of the assets and liabilities of the Authority ("the Insurance Regulatory Authority established by;") of the last day of that year. Section 4B(3) The accounts of the Authority ("the Insurance Regulatory Authority established by;") shall be audited and reported upon in accordance with the Public Audit Act ( Cap. 412B ). [Act No. 11 of 2006 .]
  22. 4C

    THE INSURANCE REGULATORY AUTHORITY - 4C. Supersession

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    If this Act conflicts with any written law regarding the Board's or the Authority's powers or functions under this Act, the provisions of this Act prevail.

    Section 4C. Supersession Section Where there is a conflict between the provisions of this Act and the provisions of any written law with regard to the powers or functions of the Board ("the Board of Directors of the Authority constituted under;") or the Authority ("the Insurance Regulatory Authority established by;") under this Act, the provisions of this Act shall prevail. [Act No. 11 of 2006 , s. 5.]
  23. 5

    THE INSURANCE REGULATORY AUTHORITY - 5. Particular duties ofCommissioner

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    Specifies duties for the Commissioner and the Board, requires the Board to report annually to the Cabinet Secretary, requires the Cabinet Secretary to lay that report before the National Assembly within one month, and permits the Board to make regulations with Cabinet Secretary approval.

    Section 5. Particular duties ofCommissioner Section 5(1)(a) deleted by ActNo. 11 of 2006, s. 6(a)(i) ; Section 5(1)(b) directing insurers and reinsurers on the standardisation of contracts of compulsory insurance; Section 5(1)(c) directing an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or a reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") , where he is satisfied that the wording of a particular contract of insurance ("a contract of reinsurance;") issued by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") is obscure or contains ambiguous terms or terms and conditions which are unfair or oppressive to the policy -holders, to clarify, simplify, amend or delete the wording, terms or conditions, as the case may be, in respect of future contracts; Section 5(1)(d) the approval of tariffs and rates of insurance in respect of any class or classes of insurance; Section 5(1)(e) such other duties as the Board ("the Board of Directors of the Authority constituted under;") may assign to him. Section 5(1A) The Board ("the Board of Directors of the Authority constituted under;") may, with the approval of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") make regulations for the purpose of giving effect to the provisions of this Part. Section 5(2) As soon as reasonably practicable after each year ending on 31st December, the Board ("the Board of Directors of the Authority constituted under;") shall provide the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") with a report on the operation of this Act during that year, together with summaries of returns and documents deposited with the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") in accordance with Part VI during that year. Section 5(3) Within one month after receiving the report and summaries under subsection (2), the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") shall arrange for them to laid before the National Assembly. [Act No. 12 of 1994 , s. 2, Act No. 11 of 2006 , s. 6, Act No. 19 of 2015 , s. 32.]
  24. 5A

    THE INSURANCE REGULATORY AUTHORITY - 5A. Powers of theCommissioneron group-wide supervision

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    The Commissioner may require group members to provide information for group-wide supervision and shall impose sanctions on the holding company or group members for breaches or failures to comply.

    Section 5A. Powers of theCommissioneron group-wide supervision Section 5A(1) The Commissioner ("the officer appointed under;") may direct any member of the group to provide any information necessary for effective groupwide supervision. Section 5A(2) In the event of any breach or failure to comply with the directives of the Commissioner ("the officer appointed under;") or safeguard the interests of the policyholders, the Commissioner ("the officer appointed under;") shall impose any of the sanctions provided in the Act on the holding company or any member of the group. [Act No. 11 of 2019 , s. 3.]
  25. 6

    THE INSURANCE REGULATORY AUTHORITY - 6.[Repealed by ActNo. 11 of 2006, s. 7.]

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    Section 6 has been repealed by ActNo. 11 of 2006, s. 7.

    Section 6.[Repealed by ActNo. 11 of 2006, s. 7.]
  26. 7

    THE INSURANCE REGULATORY AUTHORITY - 7. Power to call for information and production of books or papers

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    The Commissioner may require members of the insurance industry to supply information and produce books or documents; those persons must comply and have certain certification obligations, and furnishing false information or altering documents without consent is an offence punishable by a fine or imprisonment.

    Section 7. Power to call for information and production of books or papers Section 7(1) The Commissioner ("the officer appointed under;") may, by notice in writing, require a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") to supply him with information relating to his insurance business , and that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall comply with the requirement within such period after receipt of the notice as may be specified therein failing which he shall be deemed to have failed to comply with the provisions of this Act. Section 7(2) Information supplied under this section shall be certified ("certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;") by a principal officer ("an officer appointed under;") of the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") in question and, if the notice so requires, also by an auditor . Section 7(3)(a) require a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") to produce, at such time and place as he may specify, such books or documents as he may specify; or Section 7(3)(b) authorize any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , on producing (if required to do so) evidence of his authority, to require a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") to produce to him forthwith any books or documents which that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") may specify. Section 7(4) Where by virtue of subsection (3) the Commissioner ("the officer appointed under;") or a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") authorized by him has power to require the production of books or documents from a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") , the Commissioner ("the officer appointed under;") or that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall have the same power to require production of those books or documents from any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who appears to him to be in possession of them. Section 7(5) Where any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") form whom production of a document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") is required claims a lien on the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") produced by him, the production shall be without prejudice to the lien. Section 7(6)(a) to take copies of them or extracts of or from them; and Section 7(6)(a)(i) to take copies of them or extracts of or from them; and Section 7(6)(a)(ii) to require that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , or any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who is a present or past director ("a person occupying the position of a director by whatever name he may be called;") of, auditor of, or is or was at any time employed by, the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") in question, to provide an explanation of any of them; Section 7(6)(b) if the books or documents are not produced, to require the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who was required to produce them to state, to the best of his knowledge and belief, where they are. Section 7(7) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who in purported compliance with a requirement imposed under this section furnishes information which he knows to be false in a material particular, or who recklessly furnishes information which is false in a material particular, or who, having been required to produce a book or document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") for examination, alters, mutilates, damages, destroys, conceals or removes it without the written consent of the Commissioner ("the officer appointed under;") , shall be guilty of an offence and liable to a fine not exceeding two hundred thousand shillings or imprisonment for a term not exceeding twelve months or to both. [Act No. 1 of 2014 , s. 6.]
  27. 8

    THE INSURANCE REGULATORY AUTHORITY - 8. Examination of reinsurance treaties

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    Insurers must produce and supply for examination reinsurance treaties and contracts and certified copies when required; failure is an offence punishable by fine or imprisonment and further daily fines if continuing.

    Section 8. Examination of reinsurance treaties Section 8(1)(a) call upon an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to submit for his examination at his office all reinsurance treaties and other reinsurance contracts entered into by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 8(1)(b) by notice in writing, require an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to supply him with copies of any of the documents referred to in paragraph (a) certified ("certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;") by a principal officer ("an officer appointed under;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 8(2)(a) to make, at the time when the renewal of that treaty or contract next becomes due, such modifications in its terms and conditions as he may specify; or Section 8(2)(b) not to renew that treaty, contract or arrangement. Section 8(3) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who fails to comply with, or contravenes any requirement imposed under, this section shall be guilty of an offence and liable to a fine not exceeding ten thousand shillings or imprisonment for a term not exceeding twelve months or to both, and if the offence is a continuing one, to a further fine not exceeding two hundred shillings for every day during which the offence continues.
  28. 9

    THE INSURANCE REGULATORY AUTHORITY - 9. Directions and investigations

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    The Commissioner may investigate members of the insurance industry, issue written directions (including requiring information and restricting assets), require security before investigations, appoint investigators and employ advisers; failure to comply is an offence punishable by fines.

    Section 9. Directions and investigations Section 9(1)(a) an offence under this Act or default in complying with any of the provisions of this Act or any subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") legislation made thereunder has been or is likely to be committed by a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") ; or Section 9(1)(a)(i) an offence under this Act or default in complying with any of the provisions of this Act or any subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") legislation made thereunder has been or is likely to be committed by a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") ; or Section 9(1)(a)(ii) the affairs of any member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") are being conducted in a manner which is detrimental or prejudicial to the interests of that member, any policy-holder , the economy or the insurance industry; or Section 9(1)(a)(iii) an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may be unable or is likely to become unable to meet his obligations or, in the case of long term insurance business , to fulfil the reasonable expectation of policy -holders or potential policy -holders; or Section 9(1)(b) receives a requisition signed by not less than ten per cent of policy - holders holding policies of life assurance in force respectively for not less than three years with an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and which on maturity will be for a total value of not less than one million shillings, that an investigation be held into the affairs of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 9(1)(bb) receives a request to conduct an inquiry or investigation by a regulatory authority on a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act; or Section 9(1)(c) receives a requisition signed by not less than one-tenth of the shareholders holding not less than one-tenth of the issued share capital of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , that an investigation be held into his affairs , Section 9(2)(a) by notice in writing served on the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") concerned, direct him to furnish to the Commissioner ("the officer appointed under;") within such period after service of the notice, being not less than seven days, as he specifies in the notice, information in writing about such matters in relation to the affairs of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") as he so specifies; Section 9(2)(b) by notice in writing served on the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") concerned direct him not to dispose of or otherwise deal with or remove from Kenya an asset ("any property, security, item or interest of a person;") in Kenya specified in the notice during such period after service of the notice, being not more than six months, as he specifies in the notice; Section 9(2)(c) after giving the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") a reasonable opportunity of being heard, and with the written approval of the Board ("the Board of Directors of the Authority constituted under;") , give such directions in writing as he considers necessary, to be effective from a specified date; Section 9(2)(d) after giving the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") a reasonable opportunity of being heard, and with the written approval of the Board ("the Board of Directors of the Authority constituted under;") , prohibit that member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") from entering into any particular transaction or class of transactions; Section 9(2)(e) after giving the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") a reasonable opportunity of showing cause why, on such grounds as he so specifies, an investigation should not be conducted in respect of that member, with the approval in writing of the Board ("the Board of Directors of the Authority constituted under;") , investigate, or, by instrument in writing appoint any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , other than a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") in the employ of that member, to investigate the affairs of that member. Section 9(3) With regard to a requisition made under paragraph (b) or (c) of subsection (1) the Commissioner ("the officer appointed under;") may, before ordering an investigation, require the persons making the requisition to furnish security in such amount as he considers sufficient to meet the costs to be incurred by the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") and by the Commissioner ("the officer appointed under;") in respect of the investigation. Section 9(4) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who fails to comply with a direction issued or who contravenes a prohibition imposed under subsection (2) shall be guilty of an offence and liable to a fine not exceeding five thousand shillings; and if the offence is a continuing one, to a further fine not exceeding one hundred shillings for every day during which the offence continues. Section 9(5) The Commissioner ("the officer appointed under;") or other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") appointed by him to investigate the affairs of a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") may, wherever necessary, employ an auditor , actuary or other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to assist him in the investigation. Section 9(6) All expenses of, and incidental to, an investigation under this section shall be defrayed by the member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") and if they are not paid by him within a period of one month after the Commissioner ("the officer appointed under;") makes a demand to him, shall constitute a civil debt recoverable summarily by the Commissioner ("the officer appointed under;") . [Act No. 11 of 2006 , s. 8, Act No. 57 of 2012 , s. 33.]

Part III

LICENSING OF INSURERS

  1. 19

    LICENSING OF INSURERS - 19. Only licensed persons to carry oninsurance business

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    Only licensed persons may carry on insurance business; carrying on insurance business in contravention of subsection (1) is an offence punishable by fines and, for natural persons, possible imprisonment; continued contravention after conviction attracts daily fines; Commissioner may apply for liquidation of a convicted body corporate.

    Section 19. Only licensed persons to carry oninsurance business Section 19(1)(a) in Kenya (whether in respect of Kenya insurance or reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") or otherwise); or Section 19(1)(b) outside Kenya in respect of Kenya business , except Kenya business that is solely reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") . Section 19(2) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") resident in Kenya or an association of persons or body corporate established in Kenya who or which carries on insurance business in any part of the world other than Kenya is, for the purposes of this Act, taken to be an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on that business within Kenya. Section 19(3) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who carries on insurance business in contravention of subsection (1) commits an offence and on conviction is liable to a fine not exceeding five million shillings. Section 19(4) If, after being convicted of an offence under subsection (3), a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") continues to carry on insurance business in contravention of subsection (1), the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") commits a further offence on each day on which the contravention continues and on conviction is liable to a fine not exceeding five hundred thousand shillings for each such offence. Section 19(5) If a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") found guilty of an offence under subsection (3) is a natural person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") is liable, in addition to, or instead of, a fine, to imprisonment for a term not exceeding two years. Section 19(6) If a body corporate is convicted of an offence under subsection (3), the commission of the offence constitutes grounds on which the Commissioner ("the officer appointed under;") may apply to the court ("the High Court;") for the liquidation of the body corporate. [Act No. 19 of 2015 , s. 35, Act No. 10 of 2023 , Sch.]
  2. 19A

    LICENSING OF INSURERS - 19A.Takafulinsurance business

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    Persons must not undertake takaful insurance business unless licensed under this Act; the Cabinet Secretary may make regulations, after consultation with the Authority, for licensing and supervision of takaful business.

    Section 19A.Takafulinsurance business Section 19A(1) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall not undertake takaful insurance business unless that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") is licensed under this Act. Section 19A(2) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may, after consultation with the Authority ("the Insurance Regulatory Authority established by;") , make Regulations providing for the licensing and supervision by the Authority ("the Insurance Regulatory Authority established by;") of persons carrying on takaful insurance business . [Act No. 50 of 2016 , s. 3.]
  3. 20

    LICENSING OF INSURERS - 20. Placing of risks with insurers and reinsurers not licensed under this Act

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    Insurers, brokers, agents and other persons must not place Kenya business (other than reinsurance) with insurers not licensed under this Act without the prior written approval of the Commissioner; treaty reinsurance may be approved by the Commissioner subject to restrictions; facultative reinsurance requires prior written approval for each risk; contravention is an offence with fines or imprisonment.

    Section 20. Placing of risks with insurers and reinsurers not licensed under this Act Section 20(1) No insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") or other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall directly or indirectly place any Kenya business other than reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") with an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") not licensed under this Act without the prior approval, whether individually or generally, in writing of the Commissioner ("the officer appointed under;") . Section 20(2)(a) in the case of treaty reinsurance, with the approval of the Commissioner ("the officer appointed under;") to the treaty, and subject to such restrictions as he may specify; Section 20(2)(b) in the case of facultative reinsurance subject to the prior approval in writing of the Commissioner ("the officer appointed under;") to the placing of each particular risk with insurers or reinsurers not licensed under this Act. Section 20(3) Deleted by ActNo. 8 of 2021, s. 56 . Section 20(4) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes the provisions of subsection (1) or (2) shall be guilty of an offence and liable to a fine not exceeding five million shillings or to imprisonment for a term not exceeding five years or to both. Section 20(5) A policy or contract of insurance ("a contract of reinsurance;") or reinsurance effected or renewed in contravention of subsection (1) of section 19 , or subsection (1) of this section, shall not be invalid, void or unenforceable solely on the grounds of that contravention. [Act No. 7 of 1997 , s. 14, Act No. 11 of 2017 , Sch., Act No. 22 of 2017 , s. 3, Act No. 8 of 2021 , s. 56, Act No. 10 of 2023 , Sch.]
  4. 21

    LICENSING OF INSURERS - 21.[Repealed by ActNo. 19 of 2015, s. 36.]

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    Section 21 has been repealed by Act No. 19 of 2015, s. 36.

    Section 21.[Repealed by ActNo. 19 of 2015, s. 36.]
  5. 21A

    LICENSING OF INSURERS - 21A. Closed fund business

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    Allows insurers to continue pre-existing policies without renewal as 'closed fund business', permits such insurers to operate without registration (subject to specified sections), allows the Commissioner to require details within three months, makes contravention an offence with fines, requires penalties to be paid into the Policyholders' Compensation Fund, and prohibits disposing of closed fund assets without the Commissioner's prior approval.

    Section 21A. Closed fund business Section 21A(1) In this section, "closed fund business" means the continuance of insurance business for the purpose of maintaining, without renewal, any policy or contract of insurance ("a contract of reinsurance;") issued before the appointed date ("the date specified infor the coming into force of this Act;") . Section 21A(2) Subject to sections 10 and 123 (1)(b), an insurer may carry on closed fund business without registration under section 19 . Section 21A(3) Where the policy or contract of insurance ("a contract of reinsurance;") remains unpaid or undischarged, all the provisions of this Act shall apply to that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") unless the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") , in writing, specifically exempts the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") from any of the provisions of this Act. Section 21A(4) The Commissioner ("the officer appointed under;") may, by notice in writing served on the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on closed fund business, require the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to furnish the Commissioner ("the officer appointed under;") within a period not exceeding three months the particulars of the insurance business in Kenya as the Commissioner ("the officer appointed under;") may specify in the notice. Section 21A(5) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes the provisions of subsections (2) and (3) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand shillings and, if the offence is a continuing one, to a further fine of ten thousands shillings for each day during which the offence continues. Section 21A(6) The penalty imposed under subsection (5) shall be paid into the Policyholders' Compensation Fund. Section 21A(7) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall not dispose of any assets from a closed fund except with the prior approval of the Commissioner ("the officer appointed under;") . [Act No. 8 of 2021 , s. 57.]
  6. 22

    LICENSING OF INSURERS - 22. Prohibition oflicensingof certain persons

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    Prohibits licensing of certain persons.

    Section 22. Prohibition oflicensingof certain persons Section the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") is a body corporate licensed under the Companies Act ( Cap. 486 ); and
  7. 23

    LICENSING OF INSURERS - 23. Minimum capital requirements and holding by Kenya citizens

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    Insurers must meet the minimum capital requirements in the Second Schedule to be licensed; the Authority may amend that Schedule by order; licensed insurers who let paid-up capital fall below the minimum commit an offence with fines and possible licence cancellation.

    Section 23. Minimum capital requirements and holding by Kenya citizens Section 23(1) No person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall be licensed as an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") unless he meets the minimum capital requirements specified in the Second Schedule. Section 23(2) The Authority ("the Insurance Regulatory Authority established by;") may, by order published in the Gazette , amend the Second Schedule. Section 23(3) Every order made under this section shall be laid before the National Assembly without unreasonable delay and unless a resolution approving the order is passed by the Assembly within twenty days on which it next sits after the order is so laid, it shall thenceforth be void by without prejudice to anything previously done thereunder or to the issuing of a new order. Section 23(3A)(a) a directive requiring the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to increase its paid-up capital to an amount higher than the minimum specified in the Regulations; or Section 23(3A)(b) a directive increasing the minimum capital adequacy requirement applicable to an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to a higher sum than that specified in the Regulations. Section 23(4) Out of the amount of the paid-out capital under subsection (1), not less than one third shall be owned by citizens of the East African Community Partner States, by a partnership whose partners are all citizens of such states, wholly owned by citizens of such states or by the Government. Section 23(4A)(a) control, or be beneficially entitled, directly or indirectly, to more than twenty-five per cent of the paid up share capital or voting rights of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 23(4A)(b) be entitled to appoint more than twenty-five per cent of the board of directors of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 23(4A)(c) a corporate entity licensed by an insurance, banking, pensions or securities regulator in Kenya; or Section 23(4A)(c)(i) a corporate entity licensed by an insurance, banking, pensions or securities regulator in Kenya; or Section 23(4A)(c)(ii) a foreign corporate entity licensed by an insurance, banking, pensions or securities regulator in it's country of origin; or Section 23(4A)(c)(iii) the Government of Kenya; Section 23(4A)(c)(iv) a state corporation within the meaning of the State Corporations Act ( Cap. 446 ); Section 23(4A)(c)(v) a company listed in a stock exchange. Section 23(4B)(i) controls, or is beneficially entitled, directly or indirectly, to more than twenty per cent of the paid up share capital or voting rights of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 23(4B)(ii) is entitled to appoint more than twenty per cent of the Board ("the Board of Directors of the Authority constituted under;") of Directors of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 23(4B)(iii) is entitled to receive more than twenty per cent of the aggregate dividends of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in any given financial year ("the calendar year;") . Section 23(4C) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who, at the commencement of subsections (4A) and (4B), holds any right, interest or office in an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") contrary to the provisions of those subsections, shall comply with the requirements thereof by the 31st December, 2011. Section 23(4D)(a) a holding company or its subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") ; Section 23(4D)(a)(i) a holding company or its subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") ; Section 23(4D)(a)(ii) a subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") or its holding company; Section 23(4D)(a)(iii) a holding company or its subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") ; Section 23(4D)(a)(iv) nominees; or Section 23(4D)(b) any member of his family; Section 23(4D)(b)(i) any member of his family; Section 23(4D)(b)(ii) a company or other body corporate controlled directly or indirectly by him, whether alone or with his associates; Section 23(4D)(b)(iii) any associate of his associates, and a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall be deemed to be a member of a family if he is the parent, spouse, brother, sister, child, uncle, aunt, nephew, niece, stepfather, stepmother, stepchild or adopted child of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") concerned, and in the case of an adopted child his adoptive parents. Section 23(5) A licensed insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who permits his paid up share capital to fall below the minimum prescribed under subsection (1) commits an offence and is liable on conviction to a penalty of one hundred thousand shillings and if the offence is a continuing one, to a further fine of five thousand shillings for every day during which the offence continues. Section 23(6) Notwithstanding any other penalty imposed under this section, the convicted insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be liable to having its license cancelled. [Act No. 18 of 1986 , Sch., Act No. 12 of 1994 , s. 5, Act No. 8 of 2009 , s. 46, Act No. 10 of 2010 , s. 52, Act No. 1 of 2014 , s. 8, Act No. 14 of 2015 , s. 24, Act No. 19 of 2015 , s. 38, Act No. 22 of 2017 , s. 4, Act No. 10 of 2023 , Sch.]
  8. 24

    LICENSING OF INSURERS - 24.[Repealed by ActNo. 22 of 2017, s. 5.]

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    Section 24 was repealed by Act No. 22 of 2017, s. 5.

    Section 24.[Repealed by ActNo. 22 of 2017, s. 5.]
  9. 25

    LICENSING OF INSURERS - 25. Requirements as to capital structure and voting rights

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    Sets minimum capital composition for insurers, requires voting rights to be strictly proportionate to paid-up share amounts, limits transfers that reduce Kenyan citizen shareholding unless the Commissioner approves, and gives the Authority power to approve subordinated loans and determine other capital.

    Section 25. Requirements as to capital structure and voting rights Section 25(1)(a) in the case of a new company, ordinary shares each of which has a single face value with voting rights and shall be irredeemable, and non-cumulative preference shares; and Section 25(1)(a)(i) in the case of a new company, ordinary shares each of which has a single face value with voting rights and shall be irredeemable, and non-cumulative preference shares; and Section 25(1)(a)(ii) in the case of existing insurers, in addition to the capital in subparagraph (1), subordinated loans as may be approved by the Authority ("the Insurance Regulatory Authority established by;") , share premiums, reserves and any other form of capital as may be determined by the Authority ("the Insurance Regulatory Authority established by;") from time to time. Section 25(1)(b) that, except during any period not exceeding one year allowed by the company for payment of calls on shares, the paid up amount is the same for all shares, whether existing or new: Section 25(1A) The capital provided under subsection (1)(a) shall not rank in priority to policyholders' interest at the time of liquidation. Section 25(2) Notwithstanding anything to the contrary contained in any law for the time being in force or in the memorandum or articles of association of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") referred to in subsection (1), but subject to the other provisions of this section, the voting rights of every shareholder of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall in all cases be strictly proportionate to the paid up amount of the shares held by him. Section 25(3) No insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall after the commencement of this Act be newly licensed for carrying on any class of insurance business if he has issued shares other than ordinary shares of the nature specified in subsection (1). Section 25(4) Subject to the other provisions contained in this Act, but notwithstanding anything contained in the Companies Act ( Cap. 486 ), or in the memorandum or articles of association of an insurer referred to in subsection (1), no insurer shall, except with the prior written approval of the Commissioner, register the transfer of any shares where the transfer has the effect of reducing the proportion of share holding of citizens of Kenya in the insurer required by section 22 or 23 . [Act No. 19 of 2015 , s. 40, Act No. 50 of 2016 , s. 4, Act No. 10 of 2023 , Sch.]
  10. 26

    LICENSING OF INSURERS - 26. Provisions relating to carrying on of both long term andgeneral insurance business

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    A person licensed as an insurer under this Act is entitled to carry on only the class or classes of insurance business for which they have been licensed.

    Section 26. Provisions relating to carrying on of both long term andgeneral insurance business Section 26(1) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed as an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under this Act shall be entitled to carry on only the class or classes of insurance business for which he has been licensed. Section 26(2) In the case of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") licensed to carry on both long term insurance business and general insurance business ("insurance business of any class or classes not being long term insurance business;") , the assets of the statutory funds established under section 45 in respect of long term insurance business shall be as absolutely the security of the policy-holders of the long term insurance business as though the statutory funds belonged to an insurer carrying on no other business than long term insurance business and shall not be liable for any contracts of the insurer for which the statutory funds would not have been liable had the business of the insurer been only long term insurance business and, notwithstanding the Companies Act ( Cap. 486 ), shall not be applied directly or indirectly, either during the winding up or otherwise, for any purpose other than those of the long term insurance business of the insurer. [Act No. 10 of 2023 , Sch.]
  11. 27

    LICENSING OF INSURERS - 27. One-third of boards to be citizens of Kenya

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    A body corporate incorporated in Kenya must not be licensed (and if licensed shall have its license cancelled) if at least one third of its board members are not Kenyan citizens.

    Section 27. One-third of boards to be citizens of Kenya Section A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") being a body corporate incorporated in Kenya with or without a share capital shall not be licensed and if licensed shall have his license cancelled, if at least one third of the members of his board of directors or managing board are not citizens of Kenya. [Act No. 12 of 1994 , s. 6, Act No. 22 of 2017 , s. 6, Act No. 10 of 2023 , Sch.]
  12. 27A

    LICENSING OF INSURERS - 27A. Qualifications of board members

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    The Board (the Board of Directors of the Authority or the managing board of such person) must comprise at least five members.

    Section 27A. Qualifications of board members Section the Board ("the Board of Directors of the Authority constituted under;") of Directors or managing board of such person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") comprises at least five members; and
  13. 28

    LICENSING OF INSURERS - 28.[Repealed by ActNo. 22 of 2017, s. 7.]

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    Section 28 was repealed by Act No. 22 of 2017, s. 7.

    Section 28.[Repealed by ActNo. 22 of 2017, s. 7.]
  14. 29

    LICENSING OF INSURERS - 29. Appropriate reinsurance arrangements

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    A person cannot be registered under section 31 unless they have reinsurance strategies and arrangements approved by the Commissioner; the Commissioner must not approve reinsurance unless contract specifies premium and commission and must not approve where retention limits are too low or too high; the Cabinet Secretary may exempt insurers in writing.

    Section 29. Appropriate reinsurance arrangements Section 29(1) Subject to subsection (3), no person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall be registered under section 31 except a person who has re-insurance strategies and arrangements, being strategies and arrangements approved by the Commissioner, for insurance of liabilities in respect of which persons, property or interests are, or are to be, insured by the insurer in the course of carrying on insurance business. Section 29(2) The Commissioner ("the officer appointed under;") shall not approve arrangements strategies or for reinsurance made or proposed to be made unless the amount of premium ("the consideration for the granting of an annuity;") and commission to be paid or the manner in which the amount of premium ("the consideration for the granting of an annuity;") and commission are to be ascertained are specified in the contract of reinsurance. Section 29(3) The Commissioner ("the officer appointed under;") shall not approve arrangements strategies or for reinsurance where, in the opinion of the Commissioner ("the officer appointed under;") , the retention limits are too low or too high. Section 29(4)(a) the class or classes of insurance business carried on or proposed to be carried on by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 29(4)(b) the amount of premiums received by or due to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") during his last preceding financial year ("the calendar year;") in respect of each class of insurance business carried on by him; Section 29(4)(c) the amount of premiums expected by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") during the next financial year ("the calendar year;") in respect of each class of insurance business to be carried on by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 29(4)(d) the size of contingency loading which can be built into the premium ("the consideration for the granting of an annuity;") rates of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 29(4)(e) the amount of reinsurance commissions received by or due to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") during his last preceding financial year ("the calendar year;") in respect of each class of insurance business carried on by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 29(4)(f) the amount of reinsurance commissions expected to be received by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") during the next financial year ("the calendar year;") in respect of each class of insurance business to be carried on by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 29(4)(g) the price of reinsurance; Section 29(4)(h) the nature and value of the assets of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 29(4)(i) the capital reserves of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and cost of servicing capital, investment policy and investment income; Section 29(4)(j) probability, number and size of losses expected and risk characteristics of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ’s portfolio; Section 29(4)(k) inter-dependence of exposure units; and Section 29(4)(l) the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or persons by whom the reinsurance is or is proposed to be undertaken. Section 29(5) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") , having regard to such matters as he considers relevant, may, by notice in writing, exempt an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , subject to such terms and conditions and for such period as he specifies in the notice, from the requirements of subsection (1). [Act No. 1 of 2014 , s. 9, Act No. 19 of 2015 , s. 42.]
  15. 30

    LICENSING OF INSURERS - 30. Application for license

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    An applicant must provide a copy of the memorandum of association or other instrument or document by which the applicant is constituted.

    Section 30. Application for license Section a copy of the memorandum of association or other instrument or document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") by which the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") is constituted;
  16. 30A

    LICENSING OF INSURERS - 30A. Opening of a branch

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    Licensed insurers must apply to the Insurance Regulatory Authority for approval before opening a branch, new place of business, or changing a branch location in Kenya; an application fee of twenty thousand shillings is payable; "branch" is defined.

    Section 30A. Opening of a branch Section 30A(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") licensed under this Act wishing to open a branch or a new place of business in Kenya, or to change the location of a branch, or an existing place of business, shall apply to the Authority ("the Insurance Regulatory Authority established by;") for approval to do so. Section 30A(2)(a) the history and financial condition of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 30A(2)(b) the adequacy of the capital base and the structure of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 30A(2)(c) the viability and earning prospects of the branch; and Section 30A(2)(d) such other matter as may have a bearing on the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or the proposed branch. Section 30A(3) There shall be payable, in respect of every application under subsection (1), a fee of twenty thousand shillings. Section 30A(4) For the purposes of this section "branch" means any permanent premises, other than its head office, at which an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") transacts business in Kenya. [Act No. 4 of 2012 , s. 33, Act No. 10 of 2023 , Sch.]
  17. 31

    LICENSING OF INSURERS - 31. Licensing

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    The Board may approve registration for an insurer if the applicant meets listed financial, managerial and operational conditions; an insurer issued a licence must pay the prescribed annual fee.

    Section 31. Licensing Section 31(1)(a) the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") has the share capital and assets, as the case may be, required by sections 22 and 23 ; Section 31(1)(b) the deposit required by section 32 has been made; Section 31(1)(c) the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") has adequate reinsurance arrangements or has been granted an exemption under section 29 ; Section 31(1)(d) the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") has adequate reserves and the methods of calculating the reserves are satisfactory; Section 31(1)(e) the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") has adequate assets in Kenya; Section 31(1)(f) the volume of business which is likely to be available to, and the earning prospects of, the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") are adequate; Section 31(1)(g) the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") is, and is likely to continue to be, able to comply with such of the provisions of this Act and regulations and directions made or issued under this Act as are applicable to the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") ; Section 31(1)(h) a fit and proper principal officer ("an officer appointed under;") who holds a technical or professional qualification in insurance, accounting or banking approved by the Commissioner ("the officer appointed under;") , and who has more than ten years’ experience in a managerial capacity in the respective sector; and Section 31(1)(h)(i) a fit and proper principal officer ("an officer appointed under;") who holds a technical or professional qualification in insurance, accounting or banking approved by the Commissioner ("the officer appointed under;") , and who has more than ten years’ experience in a managerial capacity in the respective sector; and Section 31(1)(h)(ii) a management staff comprising persons who hold technical or professional qualifications in insurance, accounting or banking approved by the Commissioner ("the officer appointed under;") and who have more than five years’ experience in the respective sector, and suitable premises and facilities in Kenya to satisfactorily serve the public in respect of the class or classes of business specified in the application, the Board ("the Board of Directors of the Authority constituted under;") shall, subject to such terms and conditions as it may consider necessary, approve the registration of the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") in respect of such class or classes of insurance as it may direct. Section 31(2) A licence issued under this section shall remain in force until cancelled under section 196 . Section 31(3) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") issued with a license under this Act shall pay the prescribed annual fee. [Act No. 12 of 1987 , s. 4, Act No. 9 of 2003 , s. 4, Act No. 11 of 2006 , s. 12, Act No. 19 of 2015 , s. 43, Act No. 22 of 2017 , s. 8, Act No. 11 of 2019 , s. 5, Act No. 8 of 2021 , s. 58, Act No. 10 of 2023 , Sch.]

Part IV

DEPOSITS

  1. 32

    DEPOSITS - 32. Deposits

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    Applicants for long-term or general insurance must deposit specified sums (five million shillings or five percentum of total assets, whichever is higher); prior operators must deposit initial smaller sums (150,000 and 50,000 shillings) and licensed applicants must top up annually until reaching the subsection (1) amounts; if deposits are used the insurer must replace them (market value) and has two months to do so or be deemed non-compliant.

    Section 32. Deposits Section 32(1)(a) where the application is in respect of long term insurance business , a sum of five million shillings or five percentum of the total assets, whichever is higher; Section 32(1)(b) where the application is in respect of general insurance business ("insurance business of any class or classes not being long term insurance business;") , a sum of five million shillings or five percentum of the total assets, whichever is higher; Section 32(1)(c) deleted by ActNo. 7 of 2002, s. 54. Section 32(2) Where an applicant ("a person applying for license, renewal of license or alteration of license under this Act;") under subsection (1) was carrying on insurance business immediately prior to the appointed date ("the date specified infor the coming into force of this Act;") he may deposit with the Bank in Kenya Government securities ("securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;") a sum of one hundred and fifty thousand shillings in respect of long term business and a sum of fifty thousand shillings in respect of general business; and if the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") is licensed he shall deposit annually thereafter further Kenya Government securities ("securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;") of the same amounts in respect of each of the two classes of business aforesaid, until the deposit reaches the value specified in subsection (1) for the class or classes of business for which the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") is licensed. Section 32(3) If any part of a deposit made under this section is used in the discharge of any liability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall deposit such additional sum in securities (estimated at the market value of the securities on the day of deposit) as will make up the amount so used and, unless the deficiency is supplied within a period of two months from the date when the deposit or any part thereof is used for discharge of liabilities, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be deemed to have failed to comply with the requirements of subsection (1). [Act No. 8 of 1996 , s. 50, Act No. 6 of 2001 , s. 60, Act No. 7 of 2002 , s. 54, Act No. 22 of 2017 , s. 9, Act No. 10 of 2023 , Sch, Act No. 10 of 2023 , Sch.]
  2. 33

    DEPOSITS - 33. Return of deposits if unlicensed

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    If an insurer licence application is not approved by the Board, the Bank must return a deposit made under section 32; and deposits made for a class of insurance business must not be refunded while the insurer continues that business (subject to section 40(2)).

    Section 33. Return of deposits if unlicensed Section 33(1) A deposit made under section 32 shall be returned by the Bank if the application for license as an insurer is not approved by the Board. Section 33(2) Subject to section 40 (2), no deposit made in respect of a class of insurance business shall be refunded so long as the insurer carries on that business. [Act No. 12 of 1987 , s. 11, Act No. 11 of 2006 , s. 13, Act No. 10 of 2023 , Sch.]
  3. 34

    DEPOSITS - 34. Deposits to be kept by Bank on behalf ofinsurer

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    When the Board approves a license application under section 31, the Bank must hold deposits made under section 32 on behalf of the insurer and must pay any interest collected on those deposits to the insurer.

    Section 34. Deposits to be kept by Bank on behalf ofinsurer Section Where the Board ("the Board of Directors of the Authority constituted under;") approves an application for a license under section 31 , a deposit made under section 32 shall be held by the Bank on behalf of the insurer and any interest due and collected by the Bank on a deposit shall be paid to the insurer. [Act No. 12 of 1987 , s. 11, Act No. 19 of 2015 , s. 44, Act No. 11 of 2019 , s. 6, Act No. 10 of 2023 , Sch.]
  4. 35

    DEPOSITS - 35. Substitution of deposits

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    An insurer may replace securities deposited under this Part with other securities, provided the replacement securities have at least the same market-estimated value as the originals.

    Section 35. Substitution of deposits Section An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may at any time replace any securities deposited by him under this Part by other securities so long as the value of the other securities estimated at the market rates prevailing at the time of replacement is not less than the value of the securities replaced estimated at the market rates prevailing when they were deposited.
  5. 36

    DEPOSITS - 36. Investment of amount deposited

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    The Bank must, on the written application of an insurer, invest all or part of the amount received on redemption of a deposited security in Kenya Government securities.

    Section 36. Investment of amount deposited Section The Bank shall, on the written application of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , invest in Kenya Government securities ("securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;") the whole or any part of the amount received on the redemption of a deposited security.
  6. 37

    DEPOSITS - 37. Variation of deposits

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    Insurers may require the Bank to sell deposited securities and reinvest proceeds; if sale or maturity proceeds fall short of market value the insurer must top up by depositing securities within two months or be deemed non-compliant with section 32.

    Section 37. Variation of deposits Section 37(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may require the Bank to sell any deposited security and to invest the net proceeds of the sale in such Kenya Government security as the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may direct and the new security shall be deemed to form part of the deposit under section 32 . Section 37(2) If the amount realized by the sale of or on the maturing of the securities (excluding in the former case the interest accrued) falls short of the market value of the securities at the date on which they were deposited with the Bank, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall make good the deficiency by a further deposit in securities estimated at the market value of the securities on the day on which they are deposited, within a period of two months from the date on which the securities matured or were sold, and unless he does so the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be deemed to have failed to comply with the requirements of section 32 as to deposits.
  7. 38

    DEPOSITS - 38. Use of deposits

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    Deposits held by an insurer must be capable of transfer, available to meet insurer liabilities except certain policy liabilities, and generally attachable on judgment with a specified policy-holder exception; deposits for long-term business must only be available to meet long-term policy liabilities.

    Section 38. Use of deposits Section 38(1)(a) be capable of being transferred, assigned, or encumbered with a mortgage or other charge, by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 38(1)(b) be available for the discharge of a liability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") other than liability in respect of a policy of insurance issued in Kenya by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 38(1)(c) be liable to attachment in execution of a judgment except a judgment obtained by a policy-holder of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of a debt due upon a policy of insurance issued in Kenya and which debt the policy - holder has been unable to recover in any other way. Section 38(2) Where a deposit is made in respect of long term insurance business , it shall not be available for the discharge of a liability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") other than a liability arising out of a policy of long term insurance issued by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") .
  8. 39

    DEPOSITS - 39. Return of deposits

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    The bank must return to an insurer the part of its deposit not needed for other classes when the insurer has ceased that class and liabilities are satisfied, upon insurer application and Authority approval.

    Section 39. Return of deposits Section Where the Authority ("the Insurance Regulatory Authority established by;") is satisfied that an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has ceased to carry on in Kenya any class of insurance business in respect of which he has been registered and that all his liabilities in Kenya in respect of that business have been satisfied or otherwise provided for, the bank shall on the application by that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and on the approval of the Authority ("the Insurance Regulatory Authority established by;") return to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") such part of the deposit as is not required in respect of any other class of insurance business carried on by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . [Act No. 12 of 1987 , s. 11, Act No. 11 of 2019 , s. 7.]
  9. 40

    DEPOSITS - 40. Increase of deposit

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    The Commissioner may require an insurer to make an additional deposit (subject to percentage caps) if the deposit or assets in Kenya are disproportionately low or to protect policy-holders; such additional deposits can be refunded when the Commissioner considers them no longer required.

    Section 40. Increase of deposit Section 40(1) Where upon examination of a return, reinsurance document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") or other document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") of or furnished by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , it appears to the Commissioner ("the officer appointed under;") that a deposit made under section 32 , or the value of the assets of the insurer in Kenya, is disproportionately low in relation to the amount of insurance business carried on by that insurer in Kenya, or that it is in the opinion of the Commissioner desirable for the protection of policy-holders, the Commissioner may, after giving the insurer a reasonable opportunity of making representations, require the insurer to make an additional deposit of such sum as he shall specify not exceeding in the case of general insurance business twenty per cent, and in the case of long term insurance business ten per cent, of the premiums paid or payable in respect of policies of insurance issued in the financial year of the insurer immediately preceding the year in which the additional deposit is required to be made: Section 40(2) An additional deposit made in accordance with subsection (1), or any part thereof, which is in the opinion of the Commissioner ("the officer appointed under;") no longer required shall be refunded to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") either on the application of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or on the initiative of the Commissioner ("the officer appointed under;") . Section 40(3) Subject to subsection (2), an additional deposit required to be made under subsection (1) shall be deemed to be a deposit made under section 32 and the provisions of this Part applicable to deposits shall apply to that additional deposit. [Act No. 18 of 2023 , s. 2.]

Part IX

ASSIGNMENTS, MORTGAGES AND NOMINATIONS

  1. 107

    ASSIGNMENTS, MORTGAGES AND NOMINATIONS - 107. Assignments of policies

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    Assignments of policies must be registered by the insurer in a register provided by the insurer; a duly registered transferee gains the transferor's powers and liabilities and may sue on the policy.

    Section 107. Assignments of policies Section 107(1)(a) endorsed upon the policy , or upon an annexure to the policy that is referred to in, or in an endorsement on, the policy ; and Section 107(1)(a)(i) endorsed upon the policy , or upon an annexure to the policy that is referred to in, or in an endorsement on, the policy ; and Section 107(1)(a)(ii) signed by the transferor in the presence of a witness; and Section 107(1)(b) shall not be recognised by or binding on the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") until registered in accordance with this section by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") liable under the policy . Section 107(2) Every assignment shall be registered in a register ("a register required to be kept and maintained under;") to be provided by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for that purpose, and the date of registration shall be inserted in the memorandum of transfer, which shall also be signed by the principal officer ("an officer appointed under;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") thereto authorized by him in writing. Section 107(3) The transferee under a duly registered assignment shall have all the powers and be subject to all the liabilities of the transferor under the policy , and may sue in his own name on the policy : Provided that nothing in this section shall be construed to admit the transferee to membership of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or to deprive the transferor of his membership in respect of a policy , except as provided in the instruments constituting the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or in his articles of association or other rules. Section 107(4) The receipt of the transferee shall be a discharge to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for all moneys paid by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under the policy . Section 107(5) Every memorandum of transfer shall, as between the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") claiming any moneys under the policy , be conclusive evidence for all purposes that the transferee was at the time of registration the absolute owner of the policy free from all trusts, rights, equities and interests (except liens or charges which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has upon the policy ), and legally entitled to receive and give a discharge for those moneys. Section 107(6) Any discharge or surrender of or security over the policy given to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") by the transferee shall be valid and effectual, notwithstanding the existence of any trust, right, equity or interest of any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") . Section 107(7) The insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") taking the discharge, surrender or security shall not be required or concerned to inquire or ascertain the circumstances in which or the consideration for which the transferee or any previous transferee became a transferee, or, except as provided by section 108 , be affected by express, implied or constructive notice of any trust, right, equity or interest. Section 107(8)(a) impose on a minor any liability to which he would not, but for this section, be subject; Section 107(8)(b) confer on a minor any power or capacity which, but for this section, he would not have; or Section 107(8)(c) validate a receipt or discharge or a surrender of, or security over, a policy given by a minor, if, but for this section, that receipt, discharge, surrender or security would not be valid.
  2. 108

    ASSIGNMENTS, MORTGAGES AND NOMINATIONS - 108. Effect of notice of trust

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    If an insurer has not acted in good faith or has received written notice of a trust, right, equity or interest, the insurer is not entitled to protection under section 107; on receipt of such notice the insurer may pay moneys into Court and the Registrar's receipt is a valid discharge.

    Section 108. Effect of notice of trust Section 108(1) Notwithstanding anything contained in section 107 , an insurer shall not be entitled to any protection under that section or to rely upon any of the provisions of that section if the insurer has not acted in good faith or has received express notice in writing of any trust, right, equity or interest of any person. Section 108(2) In case of the receipt of any such notice the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may pay into the Court any moneys payable under the policy , and the receipt of a Registrar of the Court for the moneys shall be a good and valid discharge to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for the moneys so paid in. Section 108(3) The moneys shall be paid out to such person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") as the Court orders.
  3. 109

    ASSIGNMENTS, MORTGAGES AND NOMINATIONS - 109. Assignment ofpolicytoinsurerissuing it not to merge rights, etc. underpolicy

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    Rights and liabilities under a policy are not to be treated as merged or extinguished solely because the policy was assigned to the insurer that issued it.

    Section 109. Assignment ofpolicytoinsurerissuing it not to merge rights, etc. underpolicy Section The rights and liabilities arising under a policy shall not be deemed, either at law or in equity, to be merged or extinguished by reason only of an assignment of the policy , whether at law or in equity, to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") that issued the policy .
  4. 110

    ASSIGNMENTS, MORTGAGES AND NOMINATIONS - 110. Policies held by trustees

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    Describes policies that are issued, transferred to, or have ownership vested in persons acting as trustees.

    Section 110. Policies held by trustees Section a policy has been issued or transferred to, or the ownership of a policy is otherwise vested in, persons as trustees; and
  5. 111

    ASSIGNMENTS, MORTGAGES AND NOMINATIONS - 111. Nomination bypolicyholder

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    Policyholders may nominate beneficiaries for life assurance policies; nominations must be in the policy text or by endorsement communicated to and registered by the insurer; the insurer must acknowledge registration and may charge up to ten shillings; insurer not liable for bona fide payments to registered nominees absent written notice of cancellation or change.

    Section 111. Nomination bypolicyholder Section 111(1) The holder of a policy of life assurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or persons to whom the money secured by the policy shall be paid in the event of his death: Provided that, where the nominee is a minor, the policy-holder may appoint, in the manner prescribed, any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to receive the money secured by the policy in the event of his death during the minority of the nominee. Section 111(2) Any nomination under subsection (1) in order to be effectual, shall either be incorporated in the text of the policy itself or be made by endorsement on the policy communicated to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and registered by him in the records relating to the policy , and the nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement or a further endorsement or a will, as the case may be, but unless notice in writing of any such cancellation or change has been delivered to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not be liable for any payment under the policy made bona fide by him to a nominee mentioned in the text of the policy or registered in the books of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 111(3) The insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall furnish to the policy-holder a written acknowledgement of having registered a nomination or a cancellation or change thereof, and may charge the prescribed fee not exceeding ten shillings, for registering a nomination, or its cancellation or change. Section 111(4) A transfer or assignment of a policy made in accordance with this Act shall automatically cancel a nomination: Provided that the assignment of a policy to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who bears the risk on the policy at the time of assignment, in consideration of a loan granted by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") on the security of the policy within its surrender value, or its reassignment on repayment of the loan, shall not cancel a nomination but shall affect the rights of the nominee only to the extent of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ’s interest in the policy . Section 111(5) Where the policy matures for payment during the life-time of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is insured, or where the nominee dies, or if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the policy-holder or his heirs or legal representatives or the holder of a succession certificate, as the case may be. Section 111(6) Where the nominee survives, or if there are more nominees than one, one or more nominees survive the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is insured, the amount secured by the policy shall be payable to the survivor or survivors, as the case may be. Section 111(7) The provisions of this section shall not apply to a policy to which section 100 (1) applies.

Part V

ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS

  1. 41

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 41. Capital adequacy

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    Insurers carrying on insurance business in Kenya must at all times maintain a capital adequacy ratio of one hundred per cent; insurers carrying on both long term and general insurance business must maintain separate capital adequacy ratios.

    Section 41. Capital adequacy Section 41(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on insurance business in Kenya shall at all times maintain the capital adequacy ratio ("a measure of the available capital in relation to the required capital;") of one hundred per centum. Section 41(2) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on both long term and general insurance business ("insurance business of any class or classes not being long term insurance business;") shall at all times maintain separate capital adequacy ratios. Section 41(3)(a) goodwill and other intangible assets that exceed five percent of total assets; Section 41(3)(b) deferred tax income or expenses and deferred tax assets; Section 41(3)(c) assets pledged to support credit facilities obtained by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or other specific purposes; Section 41(3)(d) assets over their concentration limits; Section 41(3)(e) all credit facilities granted by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and secured by its own shares; Section 41(3)(f) prepayments; Section 41(3)(g) one hundred per cent of fixed assets and computer equipment; Section 41(3)(h) unsecured loans; Section 41(3)(i) receivables from insurers; Section 41(3)(j) merchandise inventory; Section 41(3)(k) such other assets as may be prescribed.
  2. 42

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 42. Determination of capital required

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    The Authority must determine and apply capital charges on assets and liabilities from time to time; "capital charge" is defined as the proportion of capital to cover potential deterioration in asset value and uncertainty in liabilities.

    Section 42. Determination of capital required Section 42(1)(a) take into consideration the capital for insurance risk, market risk, credit risk and operational risk; and Section 42(1)(b) apply such capital charges on assets and liabilities as shall be determined by the Authority ("the Insurance Regulatory Authority established by;") from time to time. Section 42(2) For the purpose of this section, "capital charge" means the proportion of capital required to take care of the potential deterioration of the economic value of an asset ("any property, security, item or interest of a person;") and the uncertainty in estimating liability due to the occurrence of an adverse event. [Act No. 12 of 1994 , s. 9, Act 4 of 2004 , s. 76, Act No. 10 of 2010 , s. 53, Act No. 50 of 2016 , s. 6.]
  3. 43

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 43.[Repealed by ActNo. 50 of 2016, s. 7.]

    Verify source ↗

    Section 43 was repealed by Act No. 50 of 2016, s. 7.

    Section 43.[Repealed by ActNo. 50 of 2016, s. 7.]
  4. 43A

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 43A.[Repealed by ActNo. 28 of 2019, s. 3.]

    Verify source ↗

    Section 43A was repealed by Act No. 28 of 2019, s. 3.

    Section 43A.[Repealed by ActNo. 28 of 2019, s. 3.]
  5. 44

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 44. Assessment of assets and liabilities

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    The Commissioner may require an insurer to provide specified information about its liabilities or asset values, and may require an independent valuation if not satisfied; insurers must comply with such notices.

    Section 44. Assessment of assets and liabilities Section 44(1) The Commissioner ("the officer appointed under;") may, by notice in writing served on an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , require the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to furnish him with such information with respect to any liability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or value of an asset ("any property, security, item or interest of a person;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") as he specifies in the notice. Section 44(2) Where the Commissioner ("the officer appointed under;") is not satisfied that the value of a liability or asset ("any property, security, item or interest of a person;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") as determined by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has been correctly determined, he may, after giving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") an opportunity of making representations, by notice in writing served on the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , require the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to produce a valuation of the liability or asset ("any property, security, item or interest of a person;") worked out by an independent valuer approved by the Commissioner ("the officer appointed under;") .
  6. 45

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 45. Establishment ofstatutory fund

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    Insurers carrying on long-term insurance must establish and maintain a statutory fund in respect of their long-term business; they may create separate funds for classes of business and must keep assets and income of each fund distinct and carried to that fund.

    Section 45. Establishment ofstatutory fund Section 45(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on long term insurance business in Kenya on the appointed date ("the date specified infor the coming into force of this Act;") shall, as at the date of commencement of his financial year ("the calendar year;") next after the appointed date ("the date specified infor the coming into force of this Act;") , and every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") commencing long term insurance business in Kenya after the appointed date ("the date specified infor the coming into force of this Act;") shall, as at the date of commencement of that business, establish and maintain a statutory fund ("the fund established under;") under an appropriate name in respect of the long term insurance business carried on by him. Section 45(2) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may establish and maintain a separate statutory fund ("the fund established under;") , under an appropriate name, in respect of any class or classes of his long term insurance business . Section 45(3)(a) to establish, maintain and appropriately name one or more separate statutory funds in respect of any class or classes of long term insurance business carried on by him; Section 45(3)(b) to maintain an account in respect of each of those classes of long term insurance business and to carry and enter the receipts of each of those classes of business in the account maintained by him. Section 45(4) All amounts received by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of any class of long term insurance business , after the establishment by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") of a statutory fund ("the fund established under;") under this section, shall be carried to that fund. Section 45(5)(a) an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is maintaining more than one statutory fund ("the fund established under;") in respect of his long term insurance business ; and Section 45(5)(b) a particular policy ceases to be included in the class of the long term insurance business of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of which one of the statutory funds is maintained (in this subsection referred to as "the first fund") and commences to be included in the class of the long term insurance business of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of which another of the statutory funds is maintained (in this subsection referred to as "the second fund"), Section 45(6) The income arising from the investment of the assets of a statutory fund ("the fund established under;") shall be carried to and form part of that fund. Section 45(7) The assets of each statutory fund ("the fund established under;") shall be kept distinct and separate from all other assets of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 45(8)(a) the assets representing each statutory fund ("the fund established under;") maintained by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under this section; Section 45(8)(b) the liabilities attributable to that class or, as the case may be, each of those classes of long term insurance business .
  7. 46

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 46. Application ofstatutory fund

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    Assets of a statutory fund for a class of long-term insurance must be applied only for that class; contraventions render certain charges void, create an offence with penalties (up to twenty thousand shillings and/or up to two years' imprisonment for natural persons), expose directors and principal officers to trustee-like liability unless they prove lack of knowledge and due diligence, and allow limited use of surplus (not exceeding thirty per cent to shareholders) subject to conditions and adjustments.

    Section 46. Application ofstatutory fund Section 46(1)(a) liabilities or expenses referable to that class of long term insurance business ; and Section 46(1)(a)(i) liabilities or expenses referable to that class of long term insurance business ; and Section 46(1)(a)(ii) liabilities charged on those assets or any of them immediately prior to the appointed date ("the date specified infor the coming into force of this Act;") , or be otherwise directly or indirectly applied for any purpose other than the purpose of that class of long term insurance business ; Section 46(1)(b) paid, applied or allocated as dividends or otherwise as profits to shareholders; or Section 46(1)(b)(i) paid, applied or allocated as dividends or otherwise as profits to shareholders; or Section 46(1)(b)(ii) transferred to another statutory fund ("the fund established under;") . Section 46(2) A mortgage or charge (including a charge imposed by a court ("the High Court;") on the application of a judgment creditor) shall be void to the extent to which it contravenes subsection (1). Section 46(3) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes subsection (1) shall be guilty of an offence and liable to a penalty not exceeding twenty thousand shillings and, if he is a natural person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , additionally or in the alternative to imprisonment for a term not exceeding two years. Section 46(4) Every director ("a person occupying the position of a director by whatever name he may be called;") and principal officer ("an officer appointed under;") of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be under the same liability, in the event of a contravention of subsection (1), as if he had been a trustee under a trust for the execution of those provisions in respect of that fund, and as if the appropriate policy -holders had been beneficiaries of such a trust, unless the director ("a person occupying the position of a director by whatever name he may be called;") or principal officer ("an officer appointed under;") proves that the contravention occurred without his knowledge and that he used all due diligence to prevent the contravention. Section 46(5) Notwithstanding subsection (1), an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may, for the purposes of declaring or paying a dividend to shareholders or a bonus to policy -holders, utilize the surplus disclosed in the valuation balance sheet of a statutory fund ("the fund established under;") set out in the actuary ’s abstract relating to an investigation made in pursuance of section 57 and accepted by the Commissioner, subject to the condition that the amount allocated or paid to the shareholders out of a statutory fund shall not exceed thirty per cent of the surplus disclosed therein after making the necessary adjustments to the surplus. Section 46(6)(a) the actual amount of income tax deducted at source during the period following the date on which the last preceding investigation was made and preceding the date on which the investigation in question is made may be added to the surplus after deducting an estimated amount of income tax on the surplus, the addition and deduction being shown in the abstract prepared by the actuary ; Section 46(6)(b) the surplus may be increased by contributions out of a reserve fund subject to the condition and only to the extent that the reserve fund has been made up solely of transfers from similar surpluses disclosed by investigations in respect of which the returns have been accepted by the Commissioner ("the officer appointed under;") . Section 46(7) Notwithstanding anything to the contrary contained in this section, an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on long term insurance business may declare an interim bonus or bonuses to policy -holders whose policies mature for payment by reason of death or otherwise during the inter-investigation period on the recommendation of the investigating actuary made at the last preceding investigation. [Act No. 8 of 1991 , s. 81, Act No. 9 of 1992 , s. 59, Act No. 12 of 1994 , s. 11, Act No. 8 of 1996 , s. 52, Act No. 4 of 1999 , s. 12.]
  8. 47

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 47. Assets to be in the name ofinsurer

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    Insurer assets in Kenya must be kept in the insurer's name unless the Cabinet Secretary directs otherwise; the Cabinet Secretary may require assets to be held by an approved trustee and trustees must hold directed assets only when specified conditions are met.

    Section 47. Assets to be in the name ofinsurer Section 47(1) Unless the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") directs otherwise, none of the assets in Kenya of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, except in the case of assets required by law or by a requirement imposed by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") under subsection (3) to be vested in trustees, be kept otherwise than in the name of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 47(2) Nothing contained in subsection (1) shall be deemed to prohibit the endorsement in favour of a bank of any security or other document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") solely for the purpose of collection or realisation of any interest, bonus or dividend. Section 47(3) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may direct that the whole or a specified portion of the assets of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be held by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") approved by him as trustee of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 47(4) Assets of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") held by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") as trustee for an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be held by him in compliance with a direction given under this section if, and only if, they are assets in whose case the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has given him written notice that they are to be held by him in compliance with such a requirement, or they are assets into which the first-mentioned assets have been transposed by him on the instructions of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 47(5) No assets held by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") as trustee for an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in compliance with a direction given under this section shall, so long as the direction is in force, be released except with the consent of the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") . Section 47(6) If a mortgage or charge is created by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") at a time when there is in force a direction imposed on the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") by virtue of this section, being a mortgage or charge conferring a security on any assets which are held by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") as trustee for the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in compliance with the direction, the mortgage or charge shall, to the extent that it confers such a security, be void against the liquidator and any creditor of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . [Act No. 14 of 2015 , s. 28, Act No. 19 of 2015 , s. 48.]
  9. 48

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 48. Investments of the Assets of Insurer

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    Assets of an insurer must be invested with regard to security, liquidity and income and in accordance with investment guidelines that the Authority may issue, subject to section 41, section 50 and any instrument or articles which restrict investment.

    Section 48. Investments of the Assets of Insurer Section Subject to the provision of section 41 and 50 and to any provisions in the instruments constituting the insurer or in the articles of association or other rules of the insurer which impose restrictions upon the manner in which the assets of the insurer may be invested, the assets of an insurer shall, with sufficient regard to considerations of security, liquidity and income, be invested in accordance with the provisions of such investment guidelines as may be issued by the Authority. [Act No. 14 of 2015 , s. 29, Act No. 19 of 2015 , s. 49.]
  10. 49

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 49. Unsuitable investments

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    The Commissioner may direct an insurer to realise an investment deemed unsuitable after giving notice of the grounds and an opportunity to be heard; the insurer must comply within the time the Commissioner specifies.

    Section 49. Unsuitable investments Section If at any time the Commissioner ("the officer appointed under;") considers an investment constituting an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ’s assets to be unsuitable or undesirable, he may after giving notice to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") stating the grounds on which he proposes to exercise his power under this section and giving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") an opportunity of being heard, direct the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to realize the investment, and the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall comply with the direction within such time as may be specified in that behalf by the Commissioner ("the officer appointed under;") .
  11. 50

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 50. Insurer to submit investmentpolicy

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    Insurers must invest their assets according to the investment guidelines issued under section 48 and must submit an investment policy to the Authority for a period of at least three years (or longer if the Authority determines).

    Section 50. Insurer to submit investmentpolicy Section 50(1) Every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall invest its assets in accordance with the investment guidelines issued under section 48 . Section 50(2) Every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall submit to the Authority ("the Insurance Regulatory Authority established by;") an investment policy in such manner, form and for period not less than three years or such longer period as the Authority ("the Insurance Regulatory Authority established by;") may determine from time to time. [Act No. 18 of 1986 , Sch., Act No. 12 of 1994 , s. 13, Act No. 5 of 1998 , s. 52, Act No. 8 of 2008 , s. 61, Act No. 14 of 2015 , s. 30, Act No. 19 of 2015 , s. 50.]
  12. 51

    ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS - 51. Restriction on mortgages, etc. of assets

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    An insurer may mortgage or charge assets up to ten per cent of total assets to secure temporary loans or overdrafts; otherwise an insurer shall not mortgage or charge his assets.

    Section 51. Restriction on mortgages, etc. of assets Section 51(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may, to secure temporary loans or bank overdrafts, mortgage or charge assets not exceeding ten per cent of the total value of the total assets of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 51(2) Subject to subsection (1), an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not mortgage or charge any of his assets. [Act No. 22 of 2017 , s. 12.]

Part VI

ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS

  1. 52

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 52. Separate accounts for each class

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    If an insurer carries on more than one class of either long-term or general insurance business, the insurer must keep separate accounts of receipts and payments for each prescribed class.

    Section 52. Separate accounts for each class Section Where an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carries on more than one class of long term insurance business or more than one class of general insurance business ("insurance business of any class or classes not being long term insurance business;") , he shall keep separate accounts of receipts and payments in respect of each prescribed class of insurance business carried on by him.
  2. 53

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 53. Apportionment between classes

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    If a single amount relates to more than one class of insurance and cannot be allocated, the insurer must apportion it equitably between those classes.

    Section 53. Apportionment between classes Section Where a single amount received or paid, whether in respect of premiums, investment income, claims, commissions, reinsurance costs, administration costs, taxes or otherwise, is received or paid in respect of more than one class of business prescribed under section 52 , and the amount is not otherwise allocatable between the different classes, the insurer shall, for the purposes of this part, apportion the amount in an equitable manner between the classes of insurance business in respect of which it is received or paid.
  3. 54

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 54. Accounts and balance sheets

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    Insurers incorporated in Kenya must prepare annual accounts (revenue account, balance sheet and profit and loss or income and expenditure) after each financial year in prescribed forms; they must also prepare quarterly unaudited statements and submit them to the Commissioner within 30 days.

    Section 54. Accounts and balance sheets Section 54(1) Subject to subsection (3), every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") incorporated in Kenya shall, in respect of all insurance business wherever carried on by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; after the end of each financial year ("the calendar year;") , prepare for the year, in accordance with the prescribed forms, a revenue account for the year, a balance sheet as at the end of the year and a profit and loss account for the year, or, in the case of a company not trading for profit, an income and expenditure account of the year: Provided that an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, in respect of every quarter, prepare and submit to the Commissioner ("the officer appointed under;") , within thirty days of the end of the quarter to which it relates, an unaudited revenue account, balance sheet, profit and loss account and statement of assets and liability. Section 54(1A) The revenue account, balance sheet, profit and loss account and financial statement required to be prepared under subsection (1) shall be prepared in accordance with International Financial Reporting Standards and such accepted Kenyan reporting standards as may be prescribed. Section 54(2) Every reserve shall be calculated in accordance with the method approved for the purpose by the Commissioner ("the officer appointed under;") . Section 54(3) All amounts which are required to be shown in any account or balance sheet shall be shown in Kenya currency to the nearest shilling. Section 54(4) Notwithstanding the definition of " financial year ("the calendar year;") " in section 2 , the first financial year after the appointed date of an insurer shall mean the period ending on 31st December next after the appointed date. Section 54(5)(a) the standards issued by the International Accounting Standards Board ("the Board of Directors of the Authority constituted under;") of London; or Section 54(5)(b) Kenyan accepted standards developed by the Institute of Certified Public Accountants of Kenya. Section 54(6) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") that fails to comply with subsection (1) shall be liable to a penalty of two hundred thousand shillings and a further penalty of ten thousand shillings for each day after the expiry or. the prescribed period during which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") remains non-compliant. Section 54(7) The penalty imposed under subsection (6) shall be payable into the Policyholders' Compensation Fund. [Act No. 9 of 2003 , s. 5, Act No. 9 of 2007 , s. 57, Act No. 57 of 2012 , s. 35, Act No. 1 of 2014 , s. 10, Act No. 22 of 2017 , s. 13, Act No. 28 of 2019 , s. 4. (a),(b).]
  4. 54A

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 54A. Group Accounts

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    If an insurer is a member of a group of companies, the group of companies must submit audited group accounts.

    Section 54A. Group Accounts Section Where an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is a member of a group of companies, the group of companies shall submit audited group accounts. [Act No. 22 of 2017 , s. 14.]
  5. 55

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 55. Accounting records

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    Insurers must keep accounting records that accurately record and explain their transactions and financial position, maintain them so required accounts and statements can be prepared and audited, and retain those records for at least seven years after the related transactions are completed.

    Section 55. Accounting records Section 55(1)(a) keep such accounting records as correctly record and explain the transactions and financial position of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") with respect to his insurance business ; Section 55(1)(b) so keep his accounting records as to enable the accounts, reports and statements required under this Part to be prepared; Section 55(1)(c) so keep his accounting records as to enable those accounts and statements to be conveniently and properly audited in accordance with this Act. Section 55(2) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall retain his accounting records kept in accordance with subsection (1) for at least seven years after the completion of the transactions to which they relate. Section 55(3) Deleted by ActNo. 9 of 2003, s. 6. [Act No. 9 of 2003 , s. 6.]
  6. 56

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 56. Audit andauditor’s certificate

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    Every insurer's accounts shall be audited annually by an auditor.

    Section 56. Audit andauditor’s certificate Section 56(1) The accounts of every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be audited annually by an auditor . Section 56(2)(a) the accounts and statements to which it relates appear to him to be in accordance with the Act and give particulars of any matters that do not appear to him to be so in accordance; Section 56(2)(b) the accounting records of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of that year appear to him to have been properly kept and to record and explain correctly the transactions and financial position of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and give particulars of accounting records that appear to him not to have been so kept and of transactions that appear to him not to have been so recorded; Section 56(2)(c) in respect of that year, he has obtained the information and explanations that he requested and give particulars of information and explanations he requested but did not obtain; Section 56(2)(d) he is satisfied that the accounts and statements referred to in paragraph (a) agree with the accounting records of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and appear to him truly to represent the transactions and financial position of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of the financial year ("the calendar year;") to which they relate and, if any of them appear to him to fail so to represent the transactions and financial position, give particulars of the failure; Section 56(2)(e) amounts required by section 53 to be apportioned have been equitably apportioned and if they have not been so apportioned give particulars of the failure; Section 56(2)(f) all management expenses ("expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;") wherever incurred in respect of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ’s business, whether directly or indirectly, have been fully debited in the revenue account or profit and loss account as expenses and, if they have not been so debited, give particulars of the amounts not so debited; Section 56(2)(g) every reserve has been calculated in accordance with the method approved for the reserve by the Commissioner ("the officer appointed under;") and, if they have not been so calculated, give particulars of the reserves not so calculated. Section 56(3) The auditor shall in addition issue in relation to the accounts the certificate required under the Companies Act ( Cap. 486 ). Section 56(4) Every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, for the purposes of this section, appoint annually an auditor who is approved by the Commissioner ("the officer appointed under;") . Section 56(5) If an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") fails to appoint an approved auditor under subsection (4), or to fill any vacancy for an auditor which may arise, the Commissioner ("the officer appointed under;") may appoint an auditor and fix the remuneration to be paid by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to him. Section 56(6)(a) to submit such additional information in relation to his audit as the Commissioner ("the officer appointed under;") may consider necessary; Section 56(6)(b) to carry out any other special audit or investigations; and Section 56(6)(c) to submit a report on any of the matters referred to in paragraphs (a) and (b); Section 56(7) If the auditor of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") fails to comply with the requirements of this Act, the Commissioner ("the officer appointed under;") may remove him from office and appoint another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") in his place— Section 56(8)(a) a director ("a person occupying the position of a director by whatever name he may be called;") , officer or employee of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 56(8)(b) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who is a partner of a director ("a person occupying the position of a director by whatever name he may be called;") , officer or employee of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 56(8)(c) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who is an employee or employee of a director ("a person occupying the position of a director by whatever name he may be called;") , officer or employee of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 56(8)(d) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who is a director ("a person occupying the position of a director by whatever name he may be called;") , officer or employee, of a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") related to that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 56(8)(e) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who, by himself, or his partner or his employee, regularly performs the duties of secretary or accountant for that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 56(8)(f) a firm or member of a firm of auditors of which any partner or employee falls within the above categories. Section 56(9)(a) regarded as contravened by reason of his communicating in good faith to the Commissioner ("the officer appointed under;") , whether or not in response to a request made by him, any information or opinion on a matter to which this Act applies. Section 56(9)(b) This subsection applies to any matter of which an auditor becomes aware in his capacity as an auditor or in the discharge of his duties under this Part and which relates to the business or affairs of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") .
  7. 57

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 57. Actuarial investigation

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    When an actuarial investigation under this section is made, the insurer must prepare a statement in a form and containing matters prescribed by the Insurance Regulatory Authority; the Authority prescribes valuation rules for assets and liabilities for such investigations (subject to section 58).

    Section 57. Actuarial investigation Section 57(1)(a) shall on the 31st December in every year and irrespective of any contrary provision in the articles of association or deed of settlement, cause an investigation to be made into his financial condition in accordance with section 58 ; and Section 57(1)(b) when such an investigation has been made, or when at any other time an investigation into the financial condition of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is made with a view to the distribution of profits, or the results of which are made public, shall cause an abstract of the actuary ’s report of the investigation to be made in such form and containing such matters as may be prescribed by the Authority ("the Insurance Regulatory Authority established by;") . Section 57(2)(a) a valuation of the liabilities of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") attributable insurance business ; Section 57(2)(b) in respect to long-term insurance business or any other funded insurance business , a determination of any excess over those liabilities of the assets representing the fund or funds maintained by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of that business; and where any rights of any long term policyholders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts; and Section 57(2)(c) a financial condition report in the form prescribed by the Authority ("the Insurance Regulatory Authority established by;") providing an assessment of material risks and issues impacting on the financial condition of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 57(3) Whenever an investigation to which subsection (1) relates is made, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall prepare a statement, in such form and containing such matters as may be prescribed by the Authority ("the Insurance Regulatory Authority established by;") . Section 57(4) When an investigation to which subsection (1) relates is made as at a date other than the expiry of a financial year ("the calendar year;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , the accounts for the period since the expiry of the last year of account and the balance sheet on the date as at which the investigation is made shall be prepared and audited in the manner provided under sections 54 and 56 . Section 57(5) Subject to section 58 , for the purposes of an investigation to which this section relates, the value of any assets and the amount of any liabilities shall be as prescribed by the Authority. [Act No. 18 of 1986 , Sch., Act No. 12 of 1994 , s. 15, Act No. 50 of 2016 , s. 8.]
  8. 58

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 58. Actuarial valuations

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    Requires actuaries to certify valuations on a prescribed basis; insurers must provide documents for further investigations within a period not less than three months; Commissioner may order further investigations at insurer’s expense.

    Section 58. Actuarial valuations Section 58(1) The provisions of this section apply in relation to valuation made, in respect of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on insurance business , in pursuance of section 57 . Section 58(2) The basis of valuation of technical reserves adopted shall be as prescribed by the Authority ("the Insurance Regulatory Authority established by;") . Section 58(3) The value placed upon the aggregate liabilities in respect of policies by reason of the adoption of any basis of valuation shall not be less than it would have been if it had been calculated on the prescribed basis. Section 58(4) The actuary who makes the valuation shall certify whether in his opinion the value placed upon the aggregate liabilities in respect of policies by the valuation is not less than the value which would have been placed upon those aggregate liabilities if it had been calculated on the prescribed basis. Section 58(5)(a) take necessary steps to ensure that any sum representing expenses of organisation or extension, or the purchase of business or goodwill or other intangible assets, are equitably allocated between the different statutory funds and are appropriately deducted from the surplus disclosed in each fund or appropriately added to the deficiency disclosed in each fund, as the case may be; Section 58(5)(b) satisfy himself that the value of the assets adopted by him are, on the basis of the auditor ’s certificates appended to the balance sheet, fully of the value so adopted; and Section 58(5)(c) certify in regard to the matters specified in subsections (2) and (3) and paragraphs (a) and (b) of this subsection in the prescribed form. Section 58(6) If the Commissioner ("the officer appointed under;") considers that an investigation under section 57 does not properly indicate the state of affairs of the insurer due to a faulty basis having been adopted in the valuation, the Commissioner may, after giving the insurer a reasonable opportunity of making representations, cause a further investigation in accordance with section 57 and this section as at a date which he may specify to be made at the expense of the insurer by an actuary appointed by the Commissioner or, if the Commissioner so agrees, by an actuary appointed by the insurer and approved by the Commissioner. Section 58(7) The insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall make available to the actuary all documents and information required by him for the purpose of the further investigation or valuation under subsection (6) within such period, not being less than three months, as the Commissioner ("the officer appointed under;") may specify. Section 58(8) An actuary making an investigation or valuation under subsection (6) shall prepare and attach to his report an abstract and a statement of the business of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") as for an investigation under section 57 . [Act No. 5 of 1998 , s. 53, Act No. 50 of 2016 , s. 9.]
  9. 59

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 59. Returns

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    Insurers must prepare annual statements and certificates in the prescribed form for each financial year and furnish them, signed as prescribed, to the Commissioner within the prescribed time.

    Section 59. Returns Section An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall prepare as at the end of each financial year ("the calendar year;") , in respect of that year, statements and certificates in the prescribed form relating to the business carried on during the year and the business in force at the end of the year and shall furnish those statements and certificates, signed in the prescribed manner, to the Commissioner ("the officer appointed under;") within such time as may be prescribed. [Act No. 5 of 1998 , s. 54.]
  10. 60

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 60. Accounts and statements to be signed

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    Certain insurance accounts, and specified reports and returns, must be signed by identified officers: audited accounts by two directors and the principal officer (or, if only one director, by that director and the principal officer); actuarial reports by the actuary who made them; other statements or returns by the principal officer.

    Section 60. Accounts and statements to be signed Section 60(1) The audited balance sheet, profit and loss account and revenue account required to be prepared under this Part shall be signed by two directors and the principal officer ("an officer appointed under;") of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or, if there is only one director ("a person occupying the position of a director by whatever name he may be called;") , by that director ("a person occupying the position of a director by whatever name he may be called;") and by the principal officer ("an officer appointed under;") . Section 60(2) A report or abstract of an actuary made under this Part shall be signed by the actuary who made the investigation or valuation. Section 60(3) A statement or return other than a balance sheet, profit and loss account, revenue account or actuarial report or abstract shall be signed by the principal officer ("an officer appointed under;") . [Act No. 12 of 1994 , s. 16.]
  11. 61

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 61. Submission of accounts and statements

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    Insurers must deposit required accounts and statements with the Commissioner within three months of the period end; a copy of the audited balance sheet must be published in two national newspapers within thirty days of deposit. The Commissioner may extend the filing time up to three months on application and may reject incomplete or misleading documents unless resubmitted; late submission is allowed upon payment of specified penalties.

    Section 61. Submission of accounts and statements Section 61(1) Every account, balance sheet, certificate, abstract, return or statement required to be prepared or prepared under sections 54 , 56 , 57 , 58 and 59 shall be deposited with the Commissioner within three months after the end of the period to which they relate: Provided that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall cause a copy of the audited balance sheet deposited with the Commissioner ("the officer appointed under;") to be published in at least two daily newspapers of national circulation, within thirty days of such deposit. Section 61(2) The Commissioner ("the officer appointed under;") may on the application of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") extend or further extend the time specified in subsection (1) for a period not exceeding three months. Section 61(3) Where on receipt of any of the documents submitted under subsection (1), any account, balance sheet, certificate, abstract, return or statement is found to be incomplete or erroneous or misleading, the Commissioner ("the officer appointed under;") may reject it and the insurance shall be deemed not to have complied with the requirements of subsection (1) or (2), as the case may be, unless the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") is resubmitted within the period specified under those subsections. Section 61(4) Where an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") fails to submit any document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") under subsection (1) within the period prescribed in that subsection or in subsection (2), the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may make a late submission of the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") upon payment of a penalty of two hundred thousand shillings and a further penalty of ten thousand shillings for every day after the expiry of the prescribed period during which the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") remains unsubmitted. Section 61(4A) The annual accounts and statement of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be in such form as the Authority ("the Insurance Regulatory Authority established by;") may, from time to time, require and subject to such conditions as the Commissioner ("the officer appointed under;") may prescribe, may be submitted through the use of information technology. Section 61(5) The penalty under subsection (4) shall be paid to the Policy-holders Compensation Fund in such manner as may, from time to time, be prescribed by the Authority ("the Insurance Regulatory Authority established by;") . [Act No. 12 of 1994 , s. 17, Act No. 9 of 2003 , s. 7, Act No. 9 of 2007 , s. 58, Act No. 10 of 2010 , s. 54, Act No. 57 of 2012 , s. 36, Act No. 1 of 2014 , s. 11.]
  12. 62

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 62. Further information

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    An insurer must provide further information about deposited accounts or statements when the Commissioner requires it by written notice and within a period specified not less than ten days; if a person fails to comply the Commissioner may decline to accept the document and it will be deemed not deposited.

    Section 62. Further information Section 62(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, if so required by the Commissioner ("the officer appointed under;") by notice in writing served on him, furnish, within such period after service of the notice, not being less than ten days, as the Commissioner ("the officer appointed under;") specifies in the notice, information with respect to such matters relating to an account, balance sheet, certificate, abstract, return or statement deposited by him under this section as he so specifies. Section 62(2) Where a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") fails to comply with the requirements of subsection (1), the Commissioner ("the officer appointed under;") may decline to accept the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") in respect of which the further information was sought, whereupon the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") shall be deemed not to have been deposited in terms of this Act. [Act No. 12 of 1994 , s. 18.]
  13. 63

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 63. Other reports

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    Insurers must deposit certified copies of reports submitted to members or policy-holders with the Commissioner immediately after submission; insurers that are Kenyan-incorporated bodies corporate must deposit certified copies of general-meeting minutes within thirty days of the meeting.

    Section 63. Other reports Section 63(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall deposit with the Commissioner ("the officer appointed under;") a certified ("certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;") copy of every report on the affairs of the concern which is submitted to the members or policy - holders of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") immediately after its submission to the members or policy -holders, as the case may be. Section 63(2) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , being a body corporate incorporated in Kenya, shall deposit with the Commissioner ("the officer appointed under;") a certified ("certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;") copy of the minutes of the proceedings of every general meeting, as entered in the minute book of the body corporate, within thirty days from the holding of the meeting to which those minutes relate.
  14. 64

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 64. Returns sufficient compliance with Companies Act (Cap. 486)

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    That company is exempt from section 128(1) of the Companies Act (Cap. 486).

    Section 64. Returns sufficient compliance with Companies Act (Cap. 486) Section section 128(1) of that Act (which requires certain documents to be included in the annual return made by a company) shall not apply to that company; and
  15. 65

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 65. Rectification of returns

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    The Commissioner may require that deposited accounts or documents found to be inaccurate or defective be rectified within a time he specifies (not less than ten days); if a person fails to comply the Commissioner may decline to accept the document and it will be deemed not deposited.

    Section 65. Rectification of returns Section 65(1) The Commissioner ("the officer appointed under;") may, if it appears to him that any account, balance sheet, abstract, certificate, statement, return, report or other document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") deposited with him under the provisions of this Act is inaccurate or defective in any respect, require the inaccuracy or defect to be rectified within such time, not being less than ten days as he may specify in writing. Section 65(2) Where a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") fails to comply with a direction given under subsection (1), the Commissioner ("the officer appointed under;") may decline to accept the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") required to be rectified, whereupon the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") shall be deemed to have not been deposited in terms of this Act. [Act No. 12 of 1994 , s. 19.]
  16. 66

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 66. Penalty for false statements

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    A person who knowingly signs a required account or related document that is false in any material particular commits an offence and may be fined up to ten thousand shillings or imprisoned for up to twelve months, or both.

    Section 66. Penalty for false statements Section If any account, balance sheet, abstract, return, certificate, statement or other document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") required to be deposited or deposited under any provision of this Act is false in any material particular to the knowledge of any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who signs it, that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall be guilty of an offence and liable to a fine not exceeding ten thousand shillings or to imprisonment for a term not exceeding twelve months or to both.
  17. 67

    ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS - 67. Penalty for failure to comply with requirements of Part

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    An insurer who fails to comply with any requirement under this Part is guilty of an offence and liable to a fine not exceeding one hundred thousand shillings; continuing offences attract a further fine of five thousand shillings for each day. A natural person guilty of an offence may, in addition to or instead of a fine, be imprisoned for up to two years. The Commissioner may apply to the High Court for the winding up of a body corporate convicted of such an offence.

    Section 67. Penalty for failure to comply with requirements of Part Section 67(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who fails to comply with any requirement under this Part shall be guilty of an offence and liable to a fine not exceeding one hundred thousand shillings; and if the offence is a continuing one, to a further fine of five thousand shillings for every day during which the offence continues. Section 67(2) Where a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") guilty of an offence under this Part is a natural person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall be liable, in addition to, or in the alternative to, a fine, to imprisonment for a term not exceeding two years. Section 67(3) Where a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") guilty of an offence under this Part is a body corporate, then notwithstanding the imposition of any penalty, the commission of that offence shall constitute grounds whereby the Commissioner ("the officer appointed under;") may apply to the court ("the High Court;") for the winding up of that body corporate. [Act No. 12 of 1994 , s. 20, Act No. 8 of 1996 , s. 53.]

Part VIA

INSPECTION AND CONTROL OF INSURERS

  1. 67A

    INSPECTION AND CONTROL OF INSURERS - 67A. Inspection of Insurers

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    The Commissioner may cause inspections of insurers at any time and must do so when directed by the Cabinet Secretary; inspected insurers and related persons must produce books, accounts and records and supply required information within seven days or such longer times as directed.

    Section 67A. Inspection of Insurers Section 67A(1) The Commissioner ("the officer appointed under;") may, at any time and from time to time, and shall, if so directed by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") , cause an inspection to be made by any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") authorized by him in writing, of any insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, and of his books, accounts and records. Section 67A(2) When an inspection is made under subsection (1), the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, concerned and every officer and employee thereof shall produce and make available to the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") making the inspection all the books, accounts, records and other documents of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, and such correspondence, statements and information relating to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , and any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, its business and the conduct as thereof as the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") as making the inspection may require and within seven days or such longer times as he may direct in writing. Section 67A(3)(a) the books, accounts and other documents required to be produced shall not, in the course of inspection, be removed from the premises of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") or other premises at which they are produced; Section 67A(3)(b) the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") making the inspection may make copies of any books, accounts and other documents required for the purposes of his report; and Section 67A(3)(c) all information obtained in the course of the inspection shall be treated as confidential and used solely for the purposes of this Act. Section 67A(4) The person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") making the inspection shall submit his report to the Commissioner ("the officer appointed under;") ; and the report shall draw attention to any breach or non- observance of the requirements of this Act and any regulations made thereunder, any irregularity in the manner of conduct of the business of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act or any apparent mismanaging or lack of management skills in that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, and any other matter revealed or discovered in the course of the inspection warranting, in the opinion of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") making the inspection, remedial action or further investigation. [Act No. 12 of 1994 , s. 21, Act No. 9 of 2003 , s. 8, Act No. 10 of 2023 , Sch.]
  2. 67B

    INSPECTION AND CONTROL OF INSURERS - 67B. Directions topersoninspected

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    The Commissioner may, by written notice and after giving a reasonable opportunity to be heard, require the inspected person to comply with directions arising from a report under section 67A within a specified date or period.

    Section 67B. Directions topersoninspected Section The Commissioner ("the officer appointed under;") may, by notice in writing, and after giving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, a reasonable opportunity of being heard, require the inspected person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to comply by such date or within such period as maybe specified therein, with such directions as he considers necessary in connection with any matter arising out of a report made under section 67A . [Act No. 12 of 1994 , s. 21, Act No. 9 of 2003 , s. 9, Act No. 10 of 2023 , Sch.]
  3. 67C

    INSPECTION AND CONTROL OF INSURERS - 67C. Power of theCommissionerto intervene in management

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    Section 67C empowers the Commissioner to intervene in the management of an insurer for a range of specified triggers and to appoint a manager who must run the insurer’s affairs with diligence and perform listed duties.

    Section 67C. Power of theCommissionerto intervene in management Section 67C(1)(a) if the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is found to have failed to meet the capital adequacy ratios required under section 41 of the Act; Section 67C(1)(b) if the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has failed to submit any of the accounts, returns, statements, actuarial valuations or other reports under Part VI for over six months after the end of the financial year ("the calendar year;") to which they relate; Section 67C(1)(c) if the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") having failed to comply with any requirement of this Act, has continued that failure, or having contravened any provision of this Act, has continued that contravention for a period of six months after notice of such failure or contravention has been given to him by the Commissioner ("the officer appointed under;") ; Section 67C(1)(d) where, having regard to the financial circumstances of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed, the Commissioner ("the officer appointed under;") is satisfied that the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") cannot carry on the business, or any part of the business, for which he is licensed, as the case may be, in a satisfactory and efficient manner; Section 67C(1)(e) if an amount due by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under a judgement entered into in an action in Kenya arising out of a policy of insurance issued by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or a contract of reinsurance entered into by a reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") , has remained unpaid for three months after the date of the final adjudication in that action; Section 67C(1)(f) if the business of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is wholly or is unproportionately reinsured with another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; Section 67C(1)(g) if an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is unable to pay its debts within the meaning of section 384 of the Insolvency Act ( Cap. 53 ); Section 67C(1)(h) if the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is found to have made adequate reserves or to have understated the level of his liabilities; Section 67C(1)(i) if the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is discovered to have submitted or provided any accounts, returns, statements, books, records, correspondence, documents or other information relating to his business which is false or misleading; or Section 67C(1)(j) if the Commissioner ("the officer appointed under;") discovers, whether on an inspection or otherwise, or becomes aware of any fact or circumstance which, in his opinion, warrants the exercise of the relevant power in the interests of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , its shareholders, policy -holders, or reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") or in the public interest. Section 67C(2)(i) appoint a competent person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") familiar with the business of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") (in this Act referred to as a "manager") to assume the management, control and conduct of the affairs and business of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to exercise all the powers of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to the exclusion of its Board ("the Board of Directors of the Authority constituted under;") of Directors, including the use of its corporate seal; Section 67C(2)(ii) remove any officer or employee of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who, in the opinion of the Commissioner ("the officer appointed under;") , has caused or contributed to any contravention of any provisions of this Act, or any regulations or directions made thereunder or to any deterioration in the financial stability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or has been guilty of conduct detrimental to the interests of policy - holders or other creditors of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 67C(2)(iii) appoint three competent persons familiar with the business of insurers to its Board ("the Board of Directors of the Authority constituted under;") of Directors to hold office as directors who shall not be removed from office without the approval of the Commissioner ("the officer appointed under;") ; Section 67C(2)(iv) by notice in the Gazette , revoke or cancel any existing power of attorney, mandate, appointment or other authority by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in favour of any officer, employee or any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") . Section 67C(3) The appointment of a manager shall be for such period, not exceeding twelve months, as the Commissioner ("the officer appointed under;") shall specify in his instrument of appointment and may be extended by the High Court, upon the application of the Commissioner ("the officer appointed under;") if such extension appears to the High Court to be justified. Section 67C(4) A manager shall, upon assuming the management control and conduct of the affairs and business of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , discharge his duties with diligence and in accordance with sound insurance, actuarial and financial principles and, in particular, with due regard to the interests of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , its policy -holders and the insuring public in general. Section 67C(5)(a) tracing, preserving and securing all the assets and property of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 67C(5)(b) recovering all debts and other sums of money due to and owing to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 67C(5)(c) evaluating the solvency and liquidity of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 67C(5)(d) assessing the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ’s compliance with the provisions of this Act and regulations made or directions issued thereunder; Section 67C(5)(e) determining the adequacy of the capital and reserves and the management of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and recommending to the Commissioner ("the officer appointed under;") any restructuring or reorganisation which he considers necessary and which, subject to the provisions of any other written law, may be implemented by him on behalf of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; and Section 67C(5)(f) obtaining from any former principal officer ("an officer appointed under;") , director ("a person occupying the position of a director by whatever name he may be called;") , secretary, officer or employee of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") any documents, records, accounts, statements, correspondence or information relating to its business. Section 67C(5A) For the purpose of this section, preserving the assets of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall include realization of the assets of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") upon the approval of the Authority ("the Insurance Regulatory Authority established by;") . Section 67C(6)(i) the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is capable of being revived; or Section 67C(6)(ii) the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") should be liquidated. Section 67C(7) The Commissioner ("the officer appointed under;") shall, after taking into account the report of the manager, make appropriate recommendations to the Board ("the Board of Directors of the Authority constituted under;") , who shall then take a decision on the matter. Section 67C(8) Where the Board ("the Board of Directors of the Authority constituted under;") decides that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") should be liquidated, the provisions of section 123 shall apply. Section 67C(9) Neither the Commissioner ("the officer appointed under;") or any other officer or employee of the Commissioner ("the officer appointed under;") , nor the manager nor any other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") appointed, designated or approved by the Commissioner ("the officer appointed under;") under the provisions of this Part shall be liable in respect of any act or omission done in good faith in the execution of the duties undertaken by him. Section 67C(10)(a) be applied equally to all classes of policy -holders and creditors, subject to such exemptions in respect of any class of insurance as the manager may, by notice in the Gazette specify; Section 67C(10)(b) suspend the running of time for the purposes of any law of limitation in respect of any claim by any policy-holder or creditor of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 67C(10)(c) cease to apply upon the termination of the manager’s appointment whereupon the rights and obligations of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , its policy -holders and creditors shall, save to the extent provided in paragraph (b), be the same as if there had been no declaration under the provisions of this subsection: Section 67C(11) For the purpose of this section, where a moratorium is declared under subsection (10), a policyholder shall not be liable to pay any claim not payable by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") due to the moratorium. [Act No. 12 of 1994 , s. 21, Act No. 8 of 1996 , s. 54, Act No. 11 of 2006 , s. 14, Act No. 1 of 2014 , s. 12, Act No. 19 of 2015 , s. 52, Act No. 28 of 2019 , s. 5(a)(b)(c), Act No. 10 of 2023 , Sch.]
  4. 67D

    INSPECTION AND CONTROL OF INSURERS - 67D. Part to apply to unlicensed persons

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    This Part applies to any person who, in the Commissioner's opinion, is (or is deemed or suspected to be) carrying on or transacting insurance or reinsurance business without a licence or renewal under this Act.

    Section 67D. Part to apply to unlicensed persons Section 67D(1) Without prejudice to the provisions contained under section 19 , the provisions of this Part shall apply to any person who, in the opinion of the Commissioner, is, or is deemed or suspected to be carrying on or transacting insurance or reinsurance business without a license or renewal of a license under this Act. Section 67D(2)(a) transacting insurance business without a license or renewal of license, under this Act or with persons not so licensed; or Section 67D(2)(b) charging a rate of premium ("the consideration for the granting of an annuity;") other than that filed with the Commissioner ("the officer appointed under;") under section 75 ; Section 67D(2)(c) committing any other business malpractices,
  5. 67E

    INSPECTION AND CONTROL OF INSURERS - 67E. Powers of inspector

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    Persons being inspected must assist inspectors, appear for examination, and produce books; it is an offence to refuse, obstruct, or provide false or misleading information and penalties include fines, imprisonment for natural persons, and additional daily fines for continuing offences; the Commissioner may apply to court to wind up a convicted body corporate.

    Section 67E. Powers of inspector Section 67E(1)(a) give to the inspector all reasonable assistance in connection with the inspection; or Section 67E(1)(b) appear before the inspector for examination concerning matters relevant to the inspection; or Section 67E(1)(c) produce any books or documents that relate to the affairs of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") being inspected. Section 67E(2)(a) refuses or fails to comply with a requirement of an inspector which is applicable to him, to the extent to which he is able to comply with it; or Section 67E(2)(b) obstructs or hinders an inspector in the exercise of his powers under this Act; or Section 67E(2)(c) furnishes information or makes a false statement which he knows to be false or misleading in any material particular; or Section 67E(2)(d) when appearing before an inspector for examination pursuant to such requirement, makes a statement which he knows to be false or misleading in any material particular, Section 67E(3) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") convicted of an offence under subsection (2) shall be liable to a fine not exceeding fifty thousand shillings or, in the case of a natural person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , to imprisonment for a term not exceeding three years, or to both. Section 67E(4) Where an offence under subsection (2) is a continuing one, the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall, in addition to the penalty prescribed under subsection (3), be liable to a further fine of one thousand shillings for every day during which the offence continues. Section 67E(5) Where a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") convicted under subsection (3) is a body corporate, the Commissioner ("the officer appointed under;") may, notwithstanding any other penalty imposed under that subsection, apply to court ("the High Court;") for the winding up of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") . [Act No. 12 of 1994 , s. 21.]
  6. 67F

    INSPECTION AND CONTROL OF INSURERS - 67F. Expenses under Part

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    An insurer must meet any expenses incurred because of the exercise of the powers conferred by this Part in respect of that insurer.

    Section 67F. Expenses under Part Section Any expenses incurred by reason of the exercise of any of the powers conferred by this Part in respect of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be met by that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . [Act No. 12 of 1994 , s. 21.]
  7. 67G

    INSPECTION AND CONTROL OF INSURERS - 67G. Power to protect the assets of aninsurer

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    The Insurance Regulatory Authority may assume control of an insurer's assets to protect policyholders and must register instruments or take other action; it must hold directors jointly and severally liable if assets are found misappropriated.

    Section 67G. Power to protect the assets of aninsurer Section 67G(1) The Authority ("the Insurance Regulatory Authority established by;") may, for the purpose of protecting the interests of the policy - holders, assume control of the whole or part of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") 's assets, and shall register ("a register required to be kept and maintained under;") any instrument under the relevant law or take any other appropriate action it may deem necessary. Section 67G(2) The Authority ("the Insurance Regulatory Authority established by;") shall hold the directors of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to be jointly and severally liable for the recovery of the assets under subsection (1), where it establishes that the assets of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") have been misappropriated. [Act No. 4 of 2012 , s. 34.]
  8. 67H

    INSPECTION AND CONTROL OF INSURERS - 67H. Offences relating to the management of aninsurer

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    Section 67H sets out offences related to the management of an insurer and prescribes fines and/or imprisonment for individuals and companies.

    Section 67H. Offences relating to the management of aninsurer Section 67H(1)(a) fails to take all reasonable steps to secure the compliance of a registered or licensed person with this Act; Section 67H(1)(b) fails to take all reasonable steps to secure the accuracy and correctness Section 67H(1)(c) fails to supply any information required or effect any directive issued under this Act; Section 67H(1)(d) fails, without lawful j ustification, to settle a Judgment or any claim under this Act; or Section 67H(1)(e) permanently depriving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") of the property; Section 67H(1)(e)(i) permanently depriving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") of the property; Section 67H(1)(e)(ii) using the property as a pledge or security; Section 67H(1)(e)(iii) receiving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ’s property and failing to remit or reasonably account to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 67H(1)(e)(iv) dealing with the property of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in such a m anner that it cannot be returned in the condition in which it was at the time of the taking or conversion, Section 67H(2)(a) in the case of an individual, to a fine not exceeding five million shillings or to imprisonment for a term not exceeding two years; or Section 67H(2)(a)(i) in the case of an individual, to a fine not exceeding five million shillings or to imprisonment for a term not exceeding two years; or Section 67H(2)(a)(ii) in the case of a company, to a fine not exceeding ten million shillings; and Section 67H(2)(b) in the case of an individual, to a fine not exceeding ten million shillings or to imprisonment for a term not exceeding five years; or Section 67H(2)(b)(i) in the case of an individual, to a fine not exceeding ten million shillings or to imprisonment for a term not exceeding five years; or Section 67H(2)(b)(ii) in the case of a company, to a fine not exceeding thirty million shillings. Section 67H(3) The court ("the High Court;") may make an order for, the payment by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") convicted of an offence under this section of compensation to a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who suffered loss by reason of the offence. Section 67H(4) An order under subsection (3) may be in addition to or in substitution of any other penalty or remedy available to that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") . Section 67H(5)(a) the loss sustained or adverse suffered by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") claiming compensation; or Section 67H(5)(b) the profits that have accrued to the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") liable to pay the compensation.

Part VII

MANAGEMENT AND EXPENSES

  1. 68

    MANAGEMENT AND EXPENSES - 68. Approvedprincipal officerto be appointed

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    Licensed persons must at all times have a principal officer who is ordinarily resident in Kenya and responsible for control of the licensed person’s Kenya insurance business; the Commissioner may object to appointments and written notice of appointments or revocations must be given to the Commissioner.

    Section 68. Approvedprincipal officerto be appointed Section 68(1) For the purposes of this section " licensed person " means a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act as an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , reinsurer ("a person who carries on reinsurance business and includes a retrocessionaire;") , broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") , medical insurance provider ("an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;") , insurance surveyor, risk manager ("a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;") , loss assessor, loss adjuster or claims settling agent ("a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;") . Section 68(2) Every licensed person shall, at all times while he is so licensed, have a principal officer ("an officer appointed under;") . Section 68(3) The principal officer ("an officer appointed under;") appointed under subsection (2) shall be ordinarily resident in Kenya and shall be responsible for the general control, direction and supervision of the Kenya insurance business of the licensed person and shall represent the licensed person for the purposes of this Act. Section 68(4) Everything done by the principal officer ("an officer appointed under;") or a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") acting as the principal officer ("an officer appointed under;") of the licensed person in his representative capacity shall, for the purposes of this Act, be deemed to have been done by the licensed person , but this subsection shall not affect any liability of the principal officer ("an officer appointed under;") or person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") acting as the principal officer ("an officer appointed under;") under this Act. Section 68(5) Where the principal officer ("an officer appointed under;") is, or is about to be, absent from Kenya for a period exceeding three months or for any reason unable to perform his duties as principal officer ("an officer appointed under;") , the licensed person shall, if he does not revoke the appointment and appoint another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") under subsection (2) appoint another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") (not being a body corporate) resident in Kenya to act as the principal officer ("an officer appointed under;") of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed for the purposes of this Act during the absence or inability. Section 68(6) An appointment under this section shall be deemed not to have been duly made or revoked until the licensed person has given notice in writing of the appointment or revocation to the Commissioner ("the officer appointed under;") specifying the name and, in the case of an appointment, the place of residence of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") appointed. Section 68(7)(a) full name; Section 68(7)(b) date and place of birth; Section 68(7)(c) citizenship; Section 68(7)(d) academic and professional qualifications; Section 68(7)(e) work experience giving dates and nature of previous employment; Section 68(7)(f) whether he has ever been convicted of an offence involving fraud or dishonesty and if so details of the offence, place and date; Section 68(7)(g) whether he has ever been adjudicated bankrupt, applied to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounded with his creditors or made an assignment of his remuneration for their benefit and, if so, details. Section 68(8) If it appears to the Commissioner ("the officer appointed under;") that the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") appointed as principal officer ("an officer appointed under;") is not a fit and proper person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to be a principal officer ("an officer appointed under;") , the Commissioner ("the officer appointed under;") may, after giving the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") concerned an opportunity of being heard, object to the appointment. Section 68(9) Where the Commissioner ("the officer appointed under;") objects to the appointment of a principal officer ("an officer appointed under;") he shall record the reasons for his decision and furnish a copy thereof to the licensed person , who shall forthwith revoke the appointment. [Act No. 9 of 2003 , s. 11, Act No. 10 of 2023 , Sch.]
  2. 68A

    MANAGEMENT AND EXPENSES - 68A.Authorityto carry out assessment

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    The Insurance Regulatory Authority must, from time to time, assess and—if satisfied—certify in writing the suitability of persons who manage, control or have significant ownership or beneficial interest in entities licensed under the Act; persons not certified are deemed disqualified from holding such office.

    Section 68A.Authorityto carry out assessment Section 68A(1) Notwithstanding any other provision of this Act, the Authority ("the Insurance Regulatory Authority established by;") shall, from time to time, carry out an assessment of the suitability of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") managing, controlling or having a significant ownership or significant beneficial interest in a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act. Section 68A(2) An assessment under subsection (1) shall be in accordance with such criteria as may be prescribed in regulations . Section 68A(3) Where, upon an assessment under this section, the Authority ("the Insurance Regulatory Authority established by;") is satisfied as to the suitability of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") managing, controlling or having a significant ownership or significant beneficial interest in a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, it shall so certify in writing. Section 68A(4) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who, upon an assessment under this section, is not certified ("certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;") by the Authority ("the Insurance Regulatory Authority established by;") as suitable to manage or control a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Act, shall be deemed to be disqualified from holding such office. Section 68A(5) The provisions of this section shall also apply to insurance groups in respect of its significant shareholders, the group directors and management as if they were an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . [Act No. 57 of 2012 , s. 37, Act No. 1 of 2014 , s. 13, Act No. 22 of 2017 , s. 15]
  3. 69

    MANAGEMENT AND EXPENSES - 69. Directors, managers, employees and their remuneration

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    Insurers must not be directed or employ persons whose remuneration includes commission, bonus or a share in valuation surplus for long‑term insurance; there is an exception for agents or brokers and persons who share in profits of general insurance; managing directors or employees of an insurer must not be managing directors or employees of another insurer or of a bank or financial institution; after two years from the appointed date insurers and their directors or employees must not hold shares in or have financial or controlling interest in agents or brokers; contravention is an offence punishable by a fine not exceeding five thousand shillings and, for a continuing offence, a further fine of one hundred shillings per day.

    Section 69. Directors, managers, employees and their remuneration Section 69(1) Subject to subsection (2), no insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be directed or managed by, and no insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall employ in any capacity, a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose remuneration or any part thereof takes the form of commission or bonus or of a share in the valuation surplus in respect of long term insurance business . Section 69(2) The prohibition contained in subsection (1) shall not apply to the employment of agents or brokers, or to the employment of persons who share in the profits of general insurance business ("insurance business of any class or classes not being long term insurance business;") by way of bonus payments or otherwise. Section 69(3) A managing director ("a person occupying the position of a director by whatever name he may be called;") or employee of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not be a managing director ("a person occupying the position of a director by whatever name he may be called;") or employee of another insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or of a bank or financial institution . Section 69(4)(a) be appointed or continue as a director ("a person occupying the position of a director by whatever name he may be called;") of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") licensed under this Act; Section 69(4)(b) directly or indirectly acquire or hold more than one per cent of the shares or controlling interest in an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") licensed under this Act. Section 69(5) After the expiry of two years from the appointed date ("the date specified infor the coming into force of this Act;") , no insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and no director ("a person occupying the position of a director by whatever name he may be called;") or employee of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall directly or indirectly hold shares in or have any other financial or controlling interest in the affairs of an agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") . Section 69(6) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes the provisions of this section shall be guilty of an offence and liable to a fine not exceeding five thousand shillings, and if the offence is a continuing one, to a further fine of one hundred shillings for every day during which the offence continues. [Act No. 12 of 1994 , s. 22, Act No. 10 of 2023 , Sch.]
  4. 70

    MANAGEMENT AND EXPENSES - 70. Limitation ofmanagement expenses

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    Insurers may not spend management expenses in a financial year that exceed prescribed limits; the Commissioner may relax those limits for the succeeding year after consulting the Board, and insurers within relaxed limits are not treated as having contravened the rule.

    Section 70. Limitation ofmanagement expenses Section 70(1) No insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall spend in any financial year ("the calendar year;") as expenses of management an amount in excess of the prescribed limits, and in prescribing those limits regard shall be had to the size and age of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and the provision generally made for management expenses ("expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;") in the premium ("the consideration for the granting of an annuity;") rates of insurers. Section 70(2) The Commissioner ("the officer appointed under;") may, in any year, after consultation with the Board ("the Board of Directors of the Authority constituted under;") , fix for the succeeding year the extent to which the limits prescribed in regulations may be relaxed, and an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not be deemed to have contravened the provisions of subsection (1) if his expenses of management referred to in that subsection are within those, relaxed limits. [Act No. 18 of 2023 , s. 4.]
  5. 71

    MANAGEMENT AND EXPENSES - 71. Restrictions on providing financial accommodation by insurers

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    Section 71 restricts insurers from providing financial accommodation in specified circumstances, allows a limited compassionate unsecured loan to officers or employees, defines "financial accommodation," and prescribes consequences and a Commissioner power to extend certain periods.

    Section 71. Restrictions on providing financial accommodation by insurers Section 71(1)(a) grant financial accommodation on the security of its own shares; or Section 71(1)(b) to a shareholder, officer or employee of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or to a family member of such a shareholder, officer or employee; or Section 71(1)(b)(i) to a shareholder, officer or employee of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or to a family member of such a shareholder, officer or employee; or Section 71(1)(b)(ii) to a company of which the shareholder, officer or employee or family member is a shareholder, director ("a person occupying the position of a director by whatever name he may be called;") , officer or employee. Section 71(2) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may, on compassionate grounds, grant to an officer or employee of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") an unsecured loan or advance not exceeding one hundred thousand shillings on condition that the officer or employee receive no further loan or advance from the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") unless the officer or employee has fully repaid any previous loan or advance granted to the officer or employee by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 71(3)(a) the loan is one granted on the security of a policy of life assurance on which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") bears the risk; and Section 71(3)(b) the policy was issued to the director ("a person occupying the position of a director by whatever name he may be called;") on the director ("a person occupying the position of a director by whatever name he may be called;") 's own life and the loan is within the surrender value of the policy . Section 71(4) In this section, "financial accommodation" includes a loan, an advance and a financial guarantee. Section 71(5) In case of default in complying with the provisions of subsection (3) or subsection (4), a director ("a person occupying the position of a director by whatever name he may be called;") , officer, or employee who may be concerned shall, without prejudice to any other penalty which he may incur, cease to hold office under, be employed by or act for, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") granting the loan, advance, credit facility, financial guarantee or other liability on the expiry of the period of one year or three months, as the case may be. Section 71(6) The Commissioner ("the officer appointed under;") may extend the period of one year referred to in subsection (3) by periods of not more than six months at a time and, where any such extension has been granted, the reference to the period of one year in subsection (5) shall be construed as a reference to the extended period. [Act No. 10 of 2010 , s. 56, Act No. 19 of 2015 , s. 53.]
  6. 71A

    MANAGEMENT AND EXPENSES - 71A. Choice ofinsurerfor loans

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    Subsection (1) lists information and list-management requirements relating to a loanee's choice of underwriter or broker; subsection (2) makes contravention an offence punishable by a fine not exceeding five million shillings.

    Section 71A. Choice ofinsurerfor loans Section 71A(1)(a) inform a loanee, in writing, that the loanee has a right to select an underwriter or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") from a list of underwriters or brokers licensed by the Authority ("the Insurance Regulatory Authority established by;") ; Section 71A(1)(b) inform a loanee, in writing, that the loanee has an option to forfeit the right to select an underwriter or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") ; Section 71A(1)(c) not prescribe or assign an underwriter or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") to a loanee, unless the loanee forfeits in writing the right to select an underwriter or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") ; and Section 71A(1)(d) update the list of licensed brokers or underwriters availed to loanees regularly and ensure that underwriters or brokers under statutory management are excluded from the list. Section 71A(2) A bank that contravenes the provisions of subsection (1) commits an offence and shall upon conviction be liable to a fine not exceeding five million shillings. [Act No. 11 of 2017 , Sch.]
  7. 72

    MANAGEMENT AND EXPENSES - 72. Limitation on employment of managing agents

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    Insurers may not appoint a managing agent on or after the appointed date; existing managing agents employed before that date must cease within their contract or within two years of the appointed date, and insurers owe no compensation solely because of that premature termination.

    Section 72. Limitation on employment of managing agents Section 72(1) No insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall on or after the appointed date ("the date specified infor the coming into force of this Act;") appoint a managing agent ("a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;") for the conduct of his business. Section 72(2) Where an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") engaged in the business of insurance before the appointed date ("the date specified infor the coming into force of this Act;") has employed a managing agent ("a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;") for the conduct of his business then, notwithstanding anything to the contrary contained in the Companies Act ( Cap. 486 ), and notwithstanding anything to the contrary contained in the articles of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , or in any agreement entered into by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , the managing agent ("a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;") shall cease to hold office on the expiry of his contract of employment or of two years from the appointed date ("the date specified infor the coming into force of this Act;") , whichever is earlier, and no compensation shall be payable to him by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") by reason only of the premature termination of his employment as managing agent ("a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;") under this subsection.

Part VIII

RATES, POLICY TERMS AND CLAIMS SETTLEMENT

  1. 100

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 100. Family insurance policies

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    Section 100 treats certain life insurance policies as creating trusts for named beneficiaries and sets rules on appointment of trustees, vesting when no trustee exists, who may act with the policy (variation, surrender, borrowing), and defines beneficiaries including adopted and step-children.

    Section 100. Family insurance policies Section 100(1) Subject to any written law relating to bankruptcy, a policy effected (whether before, on, or after the appointed date ("the date specified infor the coming into force of this Act;") ) by a man upon his own life, and expressed to be for the benefit of his wife, or of his children, or of his wife and children, or any of them, or by a woman upon her own life and expressed to be for the benefit of her husband or of her children, or of her husband and children, or any of them, shall create a trust in favour of the objects named in the policy , and the moneys payable under that policy shall not, so long as any object of the trust remains unperformed, form part of the estate of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is insured, or be subject to his or her debts. Section 100(2) The person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is assured may, by the policy , or by a memorandum under his or her hand, appoint trustees of the moneys payable under the policy , and from time to time appoint new trustees of the moneys and may make provision for the appointment of new trustees of the moneys, and for the investment of the moneys payable under the policy . Section 100(3) Subject to subsection (4), if at any time there is no trustee, the policy shall vest in the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is assured, and his personal representatives, in trust for the purposes referred to in, and subject to, subsection (1). Section 100(4) If at any time there is no trustee and the policy is not vested in any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") in pursuance of subsection (3) and it is expedient to appoint trustees or new trustees, trustees or new trustees may be appointed by the court ("the High Court;") . Section 100(5) The receipt of a trustee, or if there is no trustee or in default of notice to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") of the existence of a trustee, the receipt of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is insured or of his personal representative, or, if the policy has been assigned in pursuance of the power to borrow money conferred by subsection (6), the receipt of the owner for the time being of the policy , shall be a discharge to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for the sum payable under the policy , or for the value of the policy , in whole or in part. Section 100(6) A trustee, or if there is no trustee or in default of notice to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") of the existence of a trustee, the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is insured or his personal representative, may vary the terms of the policy in any manner permitted by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , surrender the policy in whole or in part or borrow money upon the policy , and any money obtained by any such variation, surrender or borrowing shall be subject to the same trusts as those upon which the policy was or is held. Section 100(7) Except as expressly provided by this section, nothing in this section shall affect the operation of the law in force in Kenya relating to trustees. Section 100(8)(a) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") adopted by the first-mentioned person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") under the law of Kenya relating to the adoption of children; or Section 100(8)(b) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") adopted by the first-mentioned person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") under the law of any country relating to the adoption of children if the validity of the adoption would be recognised under the Law of Kenya; or Section 100(8)(c) a step-child of that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") .
  2. 101

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 101. Probate or administration may be dispensed with in certain cases

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    Probate or administration can be dispensed with for small insurance payments: for a single policy if payments do not exceed 100,000 shillings, or for two or more policies if the aggregate does not exceed 5,000 shillings; certain close relatives or persons who satisfy the insurer may be treated as entitled; an insurer making such payment is discharged from further liability.

    Section 101. Probate or administration may be dispensed with in certain cases Section 101(1)(a) there is only one policy under which moneys are payable by a particular insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to the personal representative of a deceased person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") and those moneys do not, excluding bonus additions, exceed one hundred thousand shillings; or Section 101(1)(b) there are two or more policies under which moneys are so payable and the aggregate of those moneys does not, excluding bonus additions, exceed five thousand shillings, Section 101(1)(i) who is the husband, wife, father, mother, child, brother, sister, nephew or niece of the deceased person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") ; or Section 101(1)(ii) who satisfies the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") that he is entitled to the property of the deceased person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") under his will or under the law relating to the disposition of the property of the deceased person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or that he is entitled to obtain probate of the will of the deceased person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or to take out letters of administration of his estate. Section 101(2) The insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") making any such payment shall be thereby discharged from all further liability in respect of the moneys payable under the policy or policies. [Act No. 9 of 2000 , s. 92.]
  3. 102

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 102. Death of owner ofpolicynot being life insured

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    Subsection (1) does not give a declared policy owner any beneficial interest they would not otherwise have; policies with surrender value above two thousand five hundred shillings (or aggregate above that across policies from the same insurer) are covered.

    Section 102. Death of owner ofpolicynot being life insured Section 102(1)(a) under the will or on the intestacy of the deceased owner to the benefit of the policy ; or Section 102(1)(b) to obtain probate of the will, or to take out letters of administration of the estate of the deceased owner, Section 102(2) Subsection (1) shall not confer on a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") declared to be the owner of a policy any beneficial interest in the policy which he would not otherwise have had. Section 102(3) This section shall apply in relation to a policy referred to in subsection (1) whether the deceased owner died before, on, or after the appointed date ("the date specified infor the coming into force of this Act;") . Section 102(4)(a) a policy the surrender value of which, at the date of the death of the deceased owner, exceeds or exceeded two thousand five hundred shillings; or Section 102(4)(b) a policy which is one of two or more policies owned by the deceased owner and issued by the same insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") if the aggregate of the surrender values of those policies at the date of the death of the deceased owner exceeds or exceeded two thousand five hundred shillings. Section 102(5) For the purposes of subsection (4), the surrender value of a policy is the amount (including any amount in respect of bonus additions) that would be paid by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") issuing the policy upon its surrender.
  4. 103

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 103. Insurer not bound to see to application of payments

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    An insurer is not responsible for ensuring how payments it makes under a policy are applied.

    Section 103. Insurer not bound to see to application of payments Section An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not in any circumstances be bound or concerned to see to the application of any moneys paid by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of any policy .
  5. 104

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 104. Power to pay intocourt

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    An insurer may pay into the High Court money payable under a policy when the insurer considers no sufficient discharge can be obtained, subject to the rules of court.

    Section 104. Power to pay intocourt Section 104(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may, subject to any rules of court ("the High Court;") in that behalf, pay into court ("the High Court;") any moneys payable by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of a policy for which, in the opinion of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , no sufficient discharge can otherwise be obtained. Section 104(2) The receipt of a Registrar of the court ("the High Court;") for the moneys shall be a good and valid discharge to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for moneys so paid in, and the moneys shall, subject to the rules of the court ("the High Court;") , be dealt with according to the order of the Court.
  6. 105

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 105. No deductions in respect of other policies

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    When a claim under a policy is paid, no deductions may be made for premiums or debts due to the insurer under any other policy except with the claimant's written consent.

    Section 105. No deductions in respect of other policies Section Where a claim arising under a policy is paid, no deductions shall, except with the consent in writing of the claimant, be made on account of premiums or debts due to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under any other policy .
  7. 106

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 106. Lost policies

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    An insurer may, on application and sufficient evidence, issue a special policy to replace a lost or destroyed original policy; the special policy substitutes for and voids the original, the applicant pays advertisement and issue costs, the insurer may require an affidavit if the sum insured exceeds one hundred thousand shillings, and if the insurer fails to issue within six months the Commissioner may order issuance.

    Section 106. Lost policies Section 106(1) Where an insured person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") claims that the policy (in this section referred to as "the original policy ") is lost or has been destroyed, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") liable under the original policy may, subject to this section, upon application by that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") and upon such evidence as to the loss or destruction of the original policy as the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") deems sufficient, issue to the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") a special policy in substitution for the original policy . Section 106(2)(a) be a copy, as nearly as can be ascertained, of the original policy in substitution for which it has been issued; Section 106(2)(b) contain copies of every endorsement on the original policy registered by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; and Section 106(2)(c) state the reason for the issue of the special policy . Section 106(3) Before issuing a special policy the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, if the amount insured, exclusive of bonus additions in the case of a policy of long term insurance, exceeds one hundred thousand shillings, require the policyholder or beneficiary to swear an affidavit regarding the loss of the original policy . Section 106(4) The expenses of advertisement and all other costs of the issue of a special policy shall be paid by the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") at the time of application. Section 106(5) The fact of the issue of a special policy and the reason for its issue shall be recorded by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in the register ("a register required to be kept and maintained under;") of policies. Section 106(6) A special policy shall be valid and available for all purposes for which the original policy in substitution for which it has been issued would have been valid and available and, after the issue of the special policy , the original policy in substitution for which it has been issued shall be void. Section 106(7) If the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") fails to issue a special policy within six months of an application in writing from the insured person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , the Commissioner ("the officer appointed under;") may, upon application and upon such evidence as to the loss or destruction of the original policy as the Commissioner ("the officer appointed under;") deems sufficient, order the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , upon such terms and within such time as the Commissioner ("the officer appointed under;") thinks fit, to issue a special policy . [Act No. 9 of 2000 , s. 93, Act No. 11 of 2019 , s. 9.]
  8. 73

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 73. Restrictions on rebates, brokerage,etc.

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    Section 73 forbids persons, insurers and brokers from offering or paying rebates or commissions above prescribed or allowed amounts; it permits direct policyholders to obtain commission benefits under prospectus/manual/agreement when taking out life assurance without an intermediary; contravention is an offence punishable by a fine not exceeding two hundred thousand shillings.

    Section 73. Restrictions on rebates, brokerage,etc. Section 73(1) No person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall offer, either directly or indirectly, as an inducement to any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to take out or renew or continue a contract of insurance ("a contract of reinsurance;") , any rebate of the whole or part of any brokerage, commission or premium ("the consideration for the granting of an annuity;") except such rebate as may be allowed in accordance with a published prospectus or manual or schedule of rates of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 73(2) No insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, in respect of Kenya business , pay to a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") as brokerage commission, any sum in excess of the amounts prescribed for or in respect of each prescribed class of business placed by that broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") with that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 73(3) No broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") shall, in respect of Kenya business pay to an agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") any commission in excess of what would have been payable had the agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") been paid by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") instead of by the broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") . Section 73(4) Nothing in this section shall prohibit a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") obtaining the benefit of the commission payable by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") under the relevant prospectus or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") ’s manual or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") ’s agreement where he takes out life assurance on his own life or on the lives of his dependants directly with the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") without the services of an intermediary ("a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;") . Section 73(5) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes any of the provisions of this section shall be guilty of an offence and liable to a fine not exceeding two hundred thousand shillings. [Act No. 9 of 2003 , s. 12, Act No. 4 of 2004 , s. 77, Act No. 11 of 2017 , Sch.]
  9. 74

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 74. Premium rates of life insurers

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    Section 74. Premium rates of life insurers Section 74(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on long term insurance business shall not issue, after the

    Section 74. Premium rates of life insurers Section 74(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on long term insurance business shall not issue, after the expiry of three months from the appointed date ("the date specified infor the coming into force of this Act;") , any policy of insurance unless the rate of premium ("the consideration for the granting of an annuity;") chargeable under the policy is a rate which has been approved by an actuary as suitable for the class of policies to which that policy belongs and that rate and the actuarial bases therefor together with the actuary ’s certificate have been filed with the Commissioner ("the officer appointed under;") at least thirty days before giving effect to the rate. Section 74(2) The Commissioner ("the officer appointed under;") may require the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to obtain, and to furnish him, within such time as he may specify, with a report by an actuary as to the suitability of the rate of premium ("the consideration for the granting of an annuity;") chargeable under any class of policy issued by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and, if the actuary considers that the rate is not suitable, a report as to the rate of premium ("the consideration for the granting of an annuity;") which the actuary approves as suitable in respect of that class of policy . Section 74(3) Where a requirement is made under subsection (2) in respect of the rate of premium ("the consideration for the granting of an annuity;") chargeable under any class of policy the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not issue, after the expiry of the period specified by the Commissioner ("the officer appointed under;") , any policy of that class until the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has in accordance with the requirement obtained the approval of the actuary to the rate of premium ("the consideration for the granting of an annuity;") , and notified the Commissioner ("the officer appointed under;") that that approval has been obtained. Section 74(4) An actuary in approving a rate of premium ("the consideration for the granting of an annuity;") in respect of a class of policy under this section shall have regard to the maximum rate of commission or rebate proposed to be paid or allowed to any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") in respect of that class of policy . Section 74(5)(a) the maximum rate of commission or rebate to which the actuary had regard when approving the rate of premium ("the consideration for the granting of an annuity;") ; or Section 74(5)(b) the maximum rate of commission or rebate payable by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") immediately prior to the appointed date ("the date specified infor the coming into force of this Act;") in respect of policies of that class (if any) issued at the rate of premium ("the consideration for the granting of an annuity;") so approved, whichever is less. Section 74(6) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes any of the provisions of this section shall be guilty of an offence and liable to a fine not exceeding fifty thousand shillings, and if the offence is a continuing one, to a further fine of two thousand shillings for every day during which the offence continues. [Act No. 18 of 1986 , Sch.]
  10. 75

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 75. Premium rates of general insurers

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    Insurers carrying on general insurance business must file schedules or manuals of premium rates with the Commissioner before starting business or within three months of the appointed date; changes require advance notice; deviations and out-of-scope rates must be reported; the Commissioner may require data or revisions; contravention is an offence with fines.

    Section 75. Premium rates of general insurers Section 75(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on general insurance business ("insurance business of any class or classes not being long term insurance business;") shall file with the Commissioner ("the officer appointed under;") , before commencing to carry on that business or before the expiry of three months from the appointed date ("the date specified infor the coming into force of this Act;") , whichever is later, a schedule or manual of rates of premium ("the consideration for the granting of an annuity;") proposed to be used by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for each class of business. Section 75(2) Where a schedule or manual of rates of premium ("the consideration for the granting of an annuity;") filed under subsection (1) is proposed to be altered or revised, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall file with the Commissioner ("the officer appointed under;") the details of and the reasons for, the alterations or the revised schedule or manual at least sixty days before giving effect to the alterations or revision. Section 75(3) If an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on general insurance business ("insurance business of any class or classes not being long term insurance business;") issues any insurance cover outside the scope of the schedule or manual of rates of premium ("the consideration for the granting of an annuity;") filed with the Commissioner ("the officer appointed under;") or considers it necessary, while using the rate contained in the schedule or manual as the basing point, to deviate therefrom to take account of the proponent’s or policyholders' past and anticipated loss experience, the physical characteristics of the subject matter of the insurance, the nature of the exposure and other relevant factors, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall file with the Commissioner ("the officer appointed under;") , within a period of thirty days full details of the rate charged. Section 75(4) The Commissioner ("the officer appointed under;") may, at any time, require an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to furnish him with statistical data and other information on the basis of which any rate or schedule or manual of rates filed with the Commissioner ("the officer appointed under;") has been computed. Section 75(5) The Commissioner ("the officer appointed under;") may, at any time, require an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to modify or revise, within such time as he may specify, the schedule or manual of rates filed with the Commissioner ("the officer appointed under;") or the practice of deviating therefrom or the practice of rating risks outside the scope of the schedule or manual and the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall carry out the required modification or revision within the stipulated time and get them approved by the Commissioner ("the officer appointed under;") . Section 75(6) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes any of the provisions of this section shall be guilty of an offence and liable to a fine not exceeding fifty thousand shillings, and if the offence is a continuing one to a further fine of two thousand shillings for every day during which the offence continues.
  11. 76

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 76. Law applicable to contracts of insurance and place of payments

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    Holders of insurance policies issued by an insurer for business carried on in Kenya have the right to receive payment in Kenya and to sue in Kenya; the section does not apply to marine insurance policies.

    Section 76. Law applicable to contracts of insurance and place of payments Section 76(1) The holder of a policy of insurance issued by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of insurance business carried on by him in Kenya on or after the appointed date ("the date specified infor the coming into force of this Act;") shall have the right, notwithstanding any agreement to the contrary contained in the policy of insurance or in any agreement relating thereto, to receive payment of any sum secured thereby in Kenya and to sue for any relief in respect of the policy in Kenya; and if action on the policy is instituted in Kenya, any question of law in connection with the policy or proceedings shall be heard and determined according to the law in force in Kenya. Section 76(2) Nothing in this section shall apply to a policy of marine insurance.
  12. 76A

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 76A. Insurance cover upon change of ownership of motor vehicle

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    Only issue a temporary cover for a period not exceeding three months pending the registration of the motor vehicle in the name of the new owner.

    Section 76A. Insurance cover upon change of ownership of motor vehicle Section only issue a temporary cover for a period not exceeding three months, pending the registration of the motor vehicle in the name of the new owner;
  13. 77

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 77. Defaults ofinsurer,brokeroragentnot to invalidatepolicy

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    Even if an insurer, broker or agent fails to comply with the Act, that failure does not invalidate any policy issued by an insurer.

    Section 77. Defaults ofinsurer,brokeroragentnot to invalidatepolicy Section Subject to this Act, failure on the part of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") to comply with any provision of this Act shall not invalidate any policy issued by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") .
  14. 78

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 78. Avoidance of contracts for unlimited amounts

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    A contract is one under which the insurer undertakes a liability whose amount or maximum amount is uncertain when the contract is entered into.

    Section 78. Avoidance of contracts for unlimited amounts Section it is a contract under which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") undertakes a liability the amount or maximum amount of which is uncertain at the time when the contract is entered into; and
  15. 79

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 79. Amounts and values in policies to be expressed in Kenya currency

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    Amounts and values in insurance policies must be expressed in Kenya currency, but if the insurer and policy-holder agree and the Commissioner approves expression in another currency, that fact and the chosen currency must be stated on the policy in clear printed or typed letters.

    Section 79. Amounts and values in policies to be expressed in Kenya currency Section 79(1)(a) aviation insurance; or Section 79(1)(b) marine insurance; or Section 79(1)(c) engineering insurance; or Section 79(1)(d) any class or classes declared by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") by notice in the Gazette , Section 79(2) If the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and policy-holder have agreed, and, in the case of a policy issued on or after the appointed date ("the date specified infor the coming into force of this Act;") , the Commissioner ("the officer appointed under;") has approved, that the sum insured, the premium ("the consideration for the granting of an annuity;") or other sum of money mentioned in a policy of insurance shall be expressed in a currency other than the currency of Kenya, the fact that the parties have agreed and the fact that the approval of the Commissioner ("the officer appointed under;") has been obtained and the currency adopted shall be stated in or endorsed on the policy in distinct terms and in printed or typed letters no smaller than and as legible as the letters of the other provisions of the policy . Section 79(3) The continued payment in respect of a policy relating to long term insurance business shall not constitute a renewal for the purposes of subsection (1). [Act No. 12 of 1994 , s. 23, Act No. 8 of 1997 , s. 56, Act No. 19 of 2015 , s. 54.]
  16. 80

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 80. Proposal andpolicydocuments not to be misleading

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    Insurers must not use forms (proposals, policies, endorsements or written matter) that are inaccurate, incomplete or likely to mislead; the Commissioner may object to forms after giving the insurer an opportunity to make representations; insurers must not use forms to which the Commissioner has objected (unless the objection is varied or set aside on appeal); contravention is an offence punishable by a fine not exceeding five thousand shillings.

    Section 80. Proposal andpolicydocuments not to be misleading Section 80(1) A form of proposal for insurance or a policy or an endorsement or any form of written matter used by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") describing the terms or conditions of, or the benefits to be or likely to be derived from, a policy of insurance shall not contain anything inaccurate or incomplete or likely to mislead a proponent or policy-holder . Section 80(2) If the Commissioner ("the officer appointed under;") is of opinion that an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has contravened the provisions of subsection (1) he may, after giving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") an opportunity of making representations, notify the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in writing that he objects to the form. Section 80(3) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not accept a proposal or issue any policy or written matter if the proposal, policy or written matter is in a form to which the Commissioner ("the officer appointed under;") has objected under this section to the extent that the objection has not been varied or set aside as a result of an appeal under section 173 . Section 80(4) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who contravenes the provisions of subsection (3) shall be guilty of an offence and liable to a fine not exceeding five thousand shillings.
  17. 81

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 81. Incorrect statements in proposals

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    An insurer may not avoid a policy solely because an agent or servant wrote incorrect particulars in the proposal, unless the incorrect statement was actually made by the proposer to the agent; the insurer bears the burden of proving that it was so made.

    Section 81. Incorrect statements in proposals Section 81(1)(a) was made in the knowledge that it was untrue or with no reasonable belief that it was true; or Section 81(1)(b) was made within the period of three years immediately preceding the date on which the policy is sought to be avoided or the date of the death of the life insured, whichever is the earlier. Section 81(2) Where an agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") or servant of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") writes or fills in, or has before the appointed date ("the date specified infor the coming into force of this Act;") written or filled in, any particulars in a proposal for a policy of insurance with the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , then, notwithstanding any law and any agreement to the contrary between the proposer and the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , a policy issued in pursuance of the proposal shall not be avoided by reason only of an incorrect or untrue statement contained in the particulars so written or filled in, unless the incorrect or untrue statement was in fact made by the proposer to the agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") or servant for the purposes of the proposal; and the burden of proving that the statement was so made shall lie upon the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") .
  18. 82

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 82. Effect of suicide or capital punishment onpolicy

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    A life assurance policy cannot be avoided just because the insured died by suicide or was executed if the insurer has agreed to pay the sum assured in those events.

    Section 82. Effect of suicide or capital punishment onpolicy Section A policy of life assurance shall not be avoided merely on the ground that the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is assured died by his own hand or act, sane or insane, or suffered capital punishment, if, upon the true construction of the policy , the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has thereby agreed to pay the sum assured in the events that have happened.
  19. 83

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 83. Particulars as to age of proposer forlife assurance

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    A proposal form for life assurance must require the proposer to state the place and date of birth of the person whose life is to be assured and the proposer must supply those particulars to the best of their knowledge and belief.

    Section 83. Particulars as to age of proposer forlife assurance Section A form of proposal shall be framed so as to require a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") making a proposal for a policy of life assurance to specify the place and date of birth of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is proposed to be assured, and the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") making the proposal shall supply those particulars to the best of his knowledge and belief.
  20. 84

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 84. Notice regarding proof of age

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    An insurer that issues a life assurance policy requiring proof of age must include with the policy a printed notice that proof of age may be required before paying the sum assured, unless the insurer has already admitted the age.

    Section 84. Notice regarding proof of age Section Where an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") issues a policy of life assurance which provides that proof of age of the life insured is a condition precedent to the payment of the sum assured, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, unless the age of the life assured has already been admitted by it, issue with the policy a printed notice stating that proof of age of the life assured may be required prior to the payment of the sum assured.
  21. 85

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 85. Procedure whereinsurerdeclines to accept proof of age

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    If an insurer refuses proof of age for a life policy, the policy-holder may apply to the Commissioner for an order; the Commissioner may (after giving the insurer a reasonable opportunity to be heard) make an order which is binding on the insurer and must be complied with.

    Section 85. Procedure whereinsurerdeclines to accept proof of age Section 85(1) If an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") declines to accept the proof of age tendered in respect of a policy of life assurance , whether issued before, on, or after the appointed date ("the date specified infor the coming into force of this Act;") , the policy-holder may apply to the Commissioner ("the officer appointed under;") for an order directing the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to accept the proof tendered. Section 85(2) On any such application, the Commissioner ("the officer appointed under;") may, after giving the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") a reasonable opportunity of being heard, make such order in relation to the application as he thinks just. Section 85(3) An order under this section shall be binding on the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and shall be complied with on his part.
  22. 86

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 86. Misstatement of age

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    If a life assurance policy's insured age is misstated, the insurer may adjust sums assured or premiums to reflect the true age; if the true age falls outside the insurer's published issuing limits the policy is void and the insurer must refund premiums (with specified deductions); certain annuities or policies where payments have already been made are excluded.

    Section 86. Misstatement of age Section 86(1) A policy of life assurance shall not be avoided by reason only of a misstatement of the age of the life assured. Section 86(2) Where the true age as shown by the proofs is greater than that on which the policy was based, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may vary the sum assured by, and the bonuses (if any) allotted to, the policy so that, as varied, they bear the same proportion to the sum assured by, and the bonuses (if any) allotted to, the policy before variation as the amount of the premiums that have become payable under the policy as issued bears to the amount of the premiums that would become payable if the policy has been based on the true age. Section 86(3)(a) vary the sum assured by, and the bonuses (if any) allotted to, the policy before variation as the amount of the premiums that have become payable under the policy as issued bears to the amount of the premiums that would have become payable if the policy had been based on the true age; or Section 86(3)(b) reduce, as from the date of issue of the policy , the premium ("the consideration for the granting of an annuity;") payable to the amount that would have been payable if the policy had been based on the true age and repay to the policy owner the amount of over-payments of premiums less any amount that has been paid as the cash value of bonuses in excess of the cash value that would have been paid if the policy had been based on the true age. Section 86(4) Notwithstanding subsections (2) and (3), where the correct age is found to be beyond the limits within which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , according to his published prospectus, issues the type of policies in question, the policy shall be void ab initio and the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall refund to the insured all the premiums received on the policy after deducting the commission payments and expenses incurred by him on the policy ; but nothing in this subsection shall apply to annuities and other policies where the insured has already received any payment under the policy .
  23. 87

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 87. Objection to and return of lifepolicy

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    If, within twenty eight days of delivery of a small-value life policy, the policy-holder returns it with a written objection or statement they do not require it, the insurer must refund any premium paid and the policy is cancelled.

    Section 87. Objection to and return of lifepolicy Section 87(1) If within twenty eight days after the delivery of an industrial life assurance policy or an ordinary life assurance policy , where the sum assured is ten thousand shillings or less, by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to the policy-holder , or, at the place of abode of the policy-holder , to some other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who is an inmate of that place apparently not less than eighteen years of age and by whom any premium ("the consideration for the granting of an annuity;") in respect of the policy is paid on behalf of the policy-holder , the policy-holder returns the policy to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") with an objection in writing to any term or condition of the policy or a statement that he does not require the policy , the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall forthwith refund any premium ("the consideration for the granting of an annuity;") which has been paid in respect of the policy which shall thereupon be cancelled. Section 87(2) For the purposes of this section, where a policy is sent by post or email or other electronic or telecommunication mode by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to whom it is issued, it shall, unless the contrary is proved, be deemed to have been delivered to him at the time at which it would reach him in the ordinary course of post. Section 87(3) For the purposes of this section, a policy shall be deemed to have been returned with an objection or statement, as the case may be, if the policy and objection or statement are posted for transmission to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") by registered post. [Act No. 11 of 2019 , s. 8.]
  24. 88

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 88. Paid-up policies

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    A policyholder who has paid at least three years’ premiums in cash and wishes to stop further premium payments may apply to the insurer to receive a paid-up policy for at least the amount determined by the rules.

    Section 88. Paid-up policies Section 88(1) A policyholder who desires to discontinue further premium ("the consideration for the granting of an annuity;") payments on a policy of life assurance on which not less than three years’ premiums have been paid in cash shall, on application to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , be entitled to receive, in lieu of that policy , a paid up policy for an amount not less than that determined in accordance with the rules. Section 88(2) The paid-up policy shall be payable upon the happening of the contingency upon the happening of which the amount assured under the original policy would have been payable.
  25. 89

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 89. Surrender of policies

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    The owner of a life policy in force for at least three years may, on application to the insurer, surrender the policy and receive at least its surrender value (less debts); the insurer is obliged to pay that amount, and the Commissioner may suspend or vary that payment if payment in cash would prejudice the insurer's financial stability or policyholders' interests.

    Section 89. Surrender of policies Section 89(1) The owner of a policy of life assurance which has been in force for at least three years shall, on application to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , be entitled to surrender the policy and to receive not less than the surrender value of the policy less the amount of any debt owing to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under, or secured by, the policy . Section 89(2) In the application of subsection (1) to a paid-up policy which has been issued in lieu of another policy , the period of three years shall be calculated from the date of issue of the original policy . Section 89(3) For the purposes of this section the surrender value of a policy shall be the amount calculated in accordance with the rules. Section 89(4) The Commissioner ("the officer appointed under;") may, on application by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , if, in his opinion, the payment in cash of surrender values as required by this section would be prejudicial to the financial stability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or to the interests of the policy -holders of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , suspend or vary for such period and subject to such conditions as the Commissioner ("the officer appointed under;") thinks fit, the obligation of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to pay those surrender values.
  26. 90

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 90. Non-forfeiture of ordinary life policies in certain cases of non-payment of premiums

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    Insurer may charge compound interest on overdue premiums on terms not less favourable to the policy-holder than prescribed terms, until payment of the overdue premium.

    Section 90. Non-forfeiture of ordinary life policies in certain cases of non-payment of premiums Section 90(1)(a) not less than three years’ premiums have been paid in cash on the policy ; and Section 90(1)(b) the surrender value of the policy (calculated as at the day immediately preceding that on which the overdue premium ("the consideration for the granting of an annuity;") falls due) exceeds the sum of the amount of the debts owing to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under, or secured by, the policy , and the amount of the overdue premium ("the consideration for the granting of an annuity;") . Section 90(2) The insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may, until payment of the overdue premium ("the consideration for the granting of an annuity;") , charge compound interest on it, on terms not less favourable to the policy-holder than such terms (if any) as are prescribed. Section 90(3) The overdue premium ("the consideration for the granting of an annuity;") and any interest charged on it under this section and unpaid shall, for the purposes of this Act, be deemed to be a debt owing to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under the policy . Section 90(4)(a) the amount due or payable to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") at the date of the notice in respect of the policy ; and Section 90(4)(b) that the policy will be forfeited at the expiration of twenty eight days after service of the notice if a sufficient sum is not paid to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in the meantime.
  27. 91

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 91. Non-forfeiture of industrial policies in certain cases of non-payment of premiums

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    If an industrial life assurance policy with at least three years’ premiums is forfeited for non-payment, the insurer must, without requiring any application from the policy-holder, grant a paid-up policy for an amount not less than that calculated in accordance with the rules.

    Section 91. Non-forfeiture of industrial policies in certain cases of non-payment of premiums Section 91(1) An industrial life assurance policy on which less than one year’s premiums have been paid shall not be forfeited by reason only of the non-payment of any premium ("the consideration for the granting of an annuity;") unless the premium ("the consideration for the granting of an annuity;") has remained unpaid for not less than four weeks after it became due. Section 91(2) An industrial life assurance policy on which not less than one year’s premiums have been paid shall not be forfeited by reason only of the non-payment of any premium ("the consideration for the granting of an annuity;") unless the premium ("the consideration for the granting of an annuity;") has remained unpaid for not less than eight weeks after it became due. Section 91(3) An industrial life assurance policy on which not less than two years’ premiums have been paid shall not be forfeited by reason only of the non-payment of any premium ("the consideration for the granting of an annuity;") , unless the premium ("the consideration for the granting of an annuity;") has remained unpaid for not less than twelve weeks after it became due. Section 91(4) In the event of an industrial life assurance policy on which not less than three years’ premiums have been paid being forfeited by reason of non-payment of any premium ("the consideration for the granting of an annuity;") , the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall, without requiring any application from the policy-holder , grant a paid up policy for an amount not less than that calculated in accordance with the rules. Section 91(5) The paid up policy shall be payable upon the happening of the contingency upon which the amount insured under the original policy would have been payable.
  28. 92

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 92. Treatment of debts on grant of paid-up policies

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    Treat the debt so owing as a debt secured by the paid up policy and make the paid up policy a security for that debt.

    Section 92. Treatment of debts on grant of paid-up policies Section to treat the debt so owing as a debt secured by the paid up policy and thereupon the paid up policy shall be a security for the debt so owing; or
  29. 93

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 93. Certain policies exempted from operation ofsections 88to 92

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    Insurers that provide annuities and other insurance investment products must publish information about those products quarterly in the manner specified by the Commissioner.

    Section 93. Certain policies exempted from operation ofsections 88to 92 Section 93(1)(a) an instrument securing the grant of an annuity for a term dependent upon human life, not being a deferred annuity during the period of deferment; or Section 93(1)(b) a policy which provides insurance against contingencies none of which may happen, not being a policy which provides for the payment of a sum of money if the life insured by the policy survives a specified period. Section 93(1A) Every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who provides annuities and other insurance investment products shall publish information regarding such annuities and other products on quarterly basis in the manner specified by the Commissioner ("the officer appointed under;") . Section 93(2) Subject to subsection (1), the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may, on the recommendation of the Commissioner ("the officer appointed under;") , by notice in the Gazette , declare that the provisions of sections 88 to 92 shall apply in respect of any policy or class of policies with such modifications as are declared in the notice, and those provisions shall apply in respect of that policy or class of policies accordingly. [Act No. 8 of 2008 , s. 62.]
  30. 94

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 94. Insurable interest essential for all policies

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    Section 94 lists who has an insurable interest for life insurance policies and protects certain child advancement policies from being void solely for lack of insurable interest.

    Section 94. Insurable interest essential for all policies Section 94(1) Subject to this Act, no policy of insurance shall be issued on the life or lives of any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or persons, or on any other event or events whatsoever, wherein the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") or persons for whose use, benefit, or on whose account such policy or policies shall be made, shall have no insurable interest. Section 94(2)(a) a parent of a child under eighteen years of age, or a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") in loco parentis of such a child, in the life of the child to the extent of funeral expenses which may be incurred by him on the death of the child; Section 94(2)(b) a husband, in the life of his wife; Section 94(2)(c) a wife, in the life of her husband; Section 94(2)(d) any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , in the life of another upon whom he is wholly or in part dependent for support or education; Section 94(2)(e) a corporation or other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , in the life of an officer or employee thereof; and Section 94(2)(f) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who has a pecuniary interest in the duration of the life of another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , in the life of that person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") . Section 94(3) A child’s advancement policy effected either before, on, or after the appointed date ("the date specified infor the coming into force of this Act;") shall not be void by reason only that the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") effecting the policy had not at the time the policy was effected an insurable interest in the life of the child.
  31. 95

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 95. Property inchild’s advancement policy

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    Rules for child advancement policies: a representative must hold the policy in trust if the policy-maker dies or is bankrupt before the child vests, the representative may deal with the policy and apply proceeds for the child's benefit, and the insurer is not obliged to ensure proceeds are applied for the child.

    Section 95. Property inchild’s advancement policy Section 95(1) The provisions of this section shall apply to every child’s advancement policy , whether effected before, on, or after the appointed date ("the date specified infor the coming into force of this Act;") . Section 95(2)(a) to any debt owing to the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under, or secured by, the policy ; Section 95(2)(b) to any dealing done, prior to the attainment by the child of the vesting age , by the owner of the policy ; and Section 95(2)(c) to any dealing done, after the attainment by the child of the vesting age and prior to the appointed date ("the date specified infor the coming into force of this Act;") , by the owner of the policy . Section 95(3) If, during a child's lifetime, a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") effecting a policy in respect of the child dies or is adjudged bankrupt before the child has reached the vesting age , the representative of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") holds the policy in trust for the child until the child reaches the vesting age or dies before reaching that age, subject to any dealings other than testamentary ones by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") before death or bankruptcy. Section 95(3A) The representative may assign, mortgage, charge, surrender, vary or otherwise deal with the policy and apply the proceeds (if any) as the representative believes to be appropriate for the maintenance or benefit of the child and the continuation of the policy . Section 95(3B) The insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") issuing the policy is under no obligation to ensure that the proceeds of the policy (if any) are applied for the maintenance or benefit of the child. Section 95(3C)(a) a deceased, means the executor or administrator of the deceased's estate; or Section 95(3C)(b) in relation to a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who has been adjudged bankrupt, means the bankruptcy trustee of the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") 's estate or the Official Receiver. Section 95(4) Nothing in this section shall invalidate a payment made before the appointed date ("the date specified infor the coming into force of this Act;") in respect of a child’s advancement policy if the payment, but for this Act, would have been valid. [Act No. 19 of 2015 , s. 55.]
  32. 96

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 96. Limitation of amount payable on death of child

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    An insurer shall not by a policy on the life of a child under ten contract to pay, in aggregate with other insurers, more than one hundred thousand shillings on the death of that child.

    Section 96. Limitation of amount payable on death of child Section 96(1) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not, by a policy effected on the life of a child, contract to pay on the death of the child under ten years of age a sum of money (apart from repayment of premiums) which, added to any amount payable (apart from repayment of premiums) on the death of the child under ten years of age by any other insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , exceeds one hundred thousand shillings. Section 96(2) In a policy to which subsection (1) refers there shall be clearly set out that the total sum recoverable as insurance moneys or other benefits from any one or more insurers (apart from repayment of premiums) shall not exceed one thousand shillings. [Act No. 9 of 2000 , s. 91.]
  33. 97

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 97. Production of prescribed certificate of death

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    An insurer must not pay any sum on the death of a child under ten years old except when a certificate of death issued under the Births and Deaths Registration Act is produced.

    Section 97. Production of prescribed certificate of death Section An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall not pay any sum (apart from repayment of premiums) on the death of a child under ten years of age except upon production of a certificate of death issued in accordance with the provision of the Births and Deaths Registration Act ( Cap. 149 ).
  34. 98

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 98. Savings as to insurable interest

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    Sections 96 and 97 do not apply to a life insurance policy for a child when the person effecting the insurance has an insurable interest in the child's life beyond the mere interest under section 94(2)(a).

    Section 98. Savings as to insurable interest Section Sections 96 and 97 shall not apply to a policy on the life of a child when the person effecting the insurance has an insurable interest, apart from the mere interest under section 94 (2)(a), in the life of the child.
  35. 99

    RATES, POLICY TERMS AND CLAIMS SETTLEMENT - 99. Protection of insured’s interests

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    Property or policy proceeds of an insured person shall not be applied to pay that person’s debts, subject to bankruptcy laws and specified exceptions (e.g. contract, charge or express testamentary direction).

    Section 99. Protection of insured’s interests Section 99(1) Subject to any written law relating to bankruptcy, the property and interest of a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") in a policy effected (whether before, on, or after the appointed date ("the date specified infor the coming into force of this Act;") ) upon his own life shall not be liable to be applied or made available in payment of his debts by a judgment, order or process of any court ("the High Court;") . Section 99(2) In the event of a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is insured dying after the appointed date ("the date specified infor the coming into force of this Act;") , the moneys payable upon his death under or in respect of a policy effected upon his life shall not, subject to any written law relating to bankruptcy, be liable to be applied or made available in payment of his debts by a judgment, order or process of any court ("the High Court;") , or by retainer by an executor or administrator, or in any other manner, except by virtue of a contract or charge made by the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") whose life is insured or by virtue of an express direction contained in his will or other testamentary instrument executed by him that the moneys arising from the policy shall be so applied. Section 99(3) A direction to pay debts, or a charge of debts upon the whole or any part of the testator’s estate, or a trust for the payment of debts, shall not be deemed to be such an express direction.

Part X

CLAIMS ON SMALL LIFE POLICIES

  1. 112

    CLAIMS ON SMALL LIFE POLICIES - 112. Claims on small life policies

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    For disputes about settlement of small life policies (sum not exceeding one hundred thousand shillings) the claimant may refer the dispute to the Commissioner, who may decide it; that decision is final and may be executed by the competent Court as if it were a decree.

    Section 112. Claims on small life policies Section 112(1) In the event of a dispute relating to the settlement of a claim on a policy of life assurance assuring a sum not exceeding one hundred thousand shillings (exclusive of any profit or bonus not being a guaranteed profit or bonus) issued by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of life assurance business transacted in Kenya, arising between a claimant under the policy and the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who issued the policy or has otherwise assumed liability in respect thereof, the dispute may at the option of the claimant be referred to the Commissioner ("the officer appointed under;") for decision, and the Commissioner ("the officer appointed under;") may, after giving an opportunity to the parties to be heard and after making such further enquiries as he may think fit, decide the matter. Section 112(2) The decision of the Commissioner ("the officer appointed under;") under this section shall be final and shall not be called in question in any court ("the High Court;") , and may be executed by the Court which would have been competent to decide the dispute if it had not been referred to the Commissioner ("the officer appointed under;") as if it were a decree passed by that court ("the High Court;") . Section 112(3) There shall be charged and collected in respect of an adjudication under this section such fees whether by way of per centage or otherwise as may be prescribed. [Act No. 9 of 2000 , s. 94.]

Part XI

TRANSFERS AND AMALGAMATIONS

  1. 113

    TRANSFERS AND AMALGAMATIONS - 113. Application to amalgamate or transfer

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    When insurers licensed under the Act intend to amalgamate or an insurer licensed under the Act intends to transfer insurance business, an application under section 113 must be made and accompanied by specified documents (draft scheme, audited accounts and balance sheets, other supporting reports or documents, and actuarial reports and abstracts for long term business); for long-term business the actuarial report must be prepared by an actuary not professionally connected with the insurers during the five years before the application; the accounts and reports must be prepared as at the date the amalgamation or transfer is to take effect, which date must be no more than twelve months before the application.

    Section 113. Application to amalgamate or transfer Section 113(1)(a) two or more insurers, licensed under this Act, intend to amalgamate; or Section 113(1)(b) an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") intends to transfer insurance business of any class to another insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and is licensed under this Act, Section 113(2)(a) the draft of the document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") under which the proposed amalgamation or transfer is to take effect; Section 113(2)(b) audited accounts and balance sheets of both insurers as on the date of the proposed amalgamation or transfer; Section 113(2)(c) any other report or document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") on which the proposed amalgamation or transfer is founded or prepared as at the date of the proposed amalgamation or transfer, as the case may be; Section 113(2)(d) actuarial reports and abstracts in respect of long term insurance business of both the insurers, such reports and abstracts of the transferor, prepared in conformity with the provisions of section 115 , as read with the requirements prescribed in the regulations as at the date of the proposed amalgamation or transfer, as the case may be. Section 113(3) Where the proposed amalgamation or transfer is in respect of long term insurance business , an application under this section shall, in addition to the documents mentioned in subsection (2), be accompanied by a report on the terms of the scheme and likely effects of the scheme on policy -holders of the insurers concerned as a result of the proposed scheme of amalgamation or transfer, prepared by an actuary who has not been professionally connected with any of the insurers at any time during the five years immediately preceding the application and prepared as at the date of the proposed amalgamation or transfer, as the case may be. Section 113(4) The audited accounts and balance sheets, reports and abstracts referred to in subsections (2) and (3) shall be prepared as at the date at which the amalgamation or transfer is intended to be effected, which date shall not be more than twelve months before the date of the application. [Act No. 12 of 1987 , s. 5, Act No. 12 of 1994 , s. 24, Act No. 4 of 2012 , s. 35, Act No. 11 of 2019 , s. 10, Act No. 10 of 2023 , Sch.]
  2. 114

    TRANSFERS AND AMALGAMATIONS - 114. Notice

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    Requires the Authority to approve the notice and statement for an intended amalgamation or transfer; makes provision for persons who claim they will be adversely affected to make written or oral representations to the Authority within thirty days of publication.

    Section 114. Notice Section 114(1)(a) notice of the intention to apply for amalgamation or transfer, approved by the Authority ("the Insurance Regulatory Authority established by;") for the purpose, has been published in the Gazette and in at least two newspapers published and circulating in Kenya; Section 114(1)(b) except in so far as he has otherwise directed, a copy of the notice has been sent to every affected policy-holder and every other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who claims an interest in a policy included in the amalgamation or transfer and has given written notice of his claim to one of the insurers involved in the amalgamation or to the transferor, as the case may be; and Section 114(1)(c) copies of a statement setting out particulars of the amalgamation or transfer, including in the case of long term insurance business the report of the actuary , and approved by the Authority ("the Insurance Regulatory Authority established by;") , have been available for inspection at one or more places in Kenya for a period of not less than thirty days beginning with the date of the first publication of the notice in accordance with paragraph (a). Section 114(2) The notice referred to in subsection (1) shall invite any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") (including an employee, director ("a person occupying the position of a director by whatever name he may be called;") , shareholder or policy-holder ) who has reasonable grounds for believing that he would be adversely affected by the carrying out of the scheme to write or make oral representations to the Authority ("the Insurance Regulatory Authority established by;") within thirty days of the publication of the notice, stating the grounds on which he believes he would be adversely affected by the carrying out of the scheme of amalgamation or transfer. [Act No. 12 of 1987 , s. 11, Act No. 4 of 2012 , s. 36.]
  3. 115

    TRANSFERS AND AMALGAMATIONS - 115. Conditions for approval in relation tolong term insurance business

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    The Insurance Regulatory Authority must not approve an application involving transfer of long-term insurance business unless the transfer scheme provides for transfer of assets for that business; where a full or partial transfer occurs, assets (or an approved proportion) representing the statutory fund maintained by the transferor must be transferred, subject to rules about actuarial value and excess distributions.

    Section 115. Conditions for approval in relation tolong term insurance business Section 115(1) The Authority ("the Insurance Regulatory Authority established by;") shall not determine an application under this Part which involves or includes a transfer of long term insurance business , unless the scheme involves a transfer of assets relating to the long term insurance business proposed to be transferred in accordance with the provisions of this section. Section 115(2) If the transfer covers all the long term insurance business of the transferor, all the assets representing the statutory fund ("the fund established under;") maintained by the transferor shall, subject to subsection (4), be transferred. Section 115(3) If the transfer applies to a part only of the long term insurance business of the transferor, the approved proportion of the assets representing the statutory fund ("the fund established under;") maintained by the transferor shall, subject to subsection (4), be transferred. Section 115(4)(a) subject to paragraphs (b) and (c) of this subsection, assets of not less than the actuarial value of the liabilities on all the policies, after making adequate provision for maintenance of bonuses at current levels, and for the reasonable expectations of policy -holders, liabilities being calculated on a proper basis, shall be transferred; Section 115(4)(b) where the total assets available in terms of subsection (2) or (3) are less in value than the figure arrived at under paragraph (a) of this subsection, the whole of the assets so available shall be transferred, and the Authority ("the Insurance Regulatory Authority established by;") shall decide, after taking into account the relevant actuarial considerations, whether any other assets of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall also be transferred and whether any provisions for reduction of contracts shall be made in the scheme of transfer; Section 115(4)(c) if the excess is equal to or less than forty per cent of the figure arrived at under paragraph (a), ninety per cent of such excess; and Section 115(4)(c)(i) if the excess is equal to or less than forty per cent of the figure arrived at under paragraph (a), ninety per cent of such excess; and Section 115(4)(c)(ii) if the excess is more than forty per cent of the figure arrived at under paragraph (a), ninety per cent of the portion of the excess amounting to forty per cent of the figure arrived at under paragraph (a) plus fifty per cent of the balance of the excess, except that where the transferor does not have a share capital, the entire excess of the assets in terms of subsection (2) or (3) over the figure arrived at under paragraph (a) shall be transferred in addition to the assets of value equal to the figure arrived at under paragraph (a). Section 115(5) For the purposes of subsections (2) and (3), the total assets shall include all assets held by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in Kenya which are applicable to, or were built out of, all the long term insurance business carried on in the past irrespective of whether they are shown against long term insurance business and irrespective of whether the business was carried on in the past solely in Kenya or elsewhere. Section 115(6) In determining the "value of the assets" due provision should be made for any possible tax liabilities arising on account of the value placed on the assets or on account of the transfer of the assets. Section 115(7) In this section— "proper basis" means the basis prescribed by the Authority ("the Insurance Regulatory Authority established by;") or the basis applicable in the case of a bonus reserve valuation, allowing provision for the maintenance of bonuses at current levels and for the reasonable expectations of policy -holders in that context, or the basis adopted at the latest preceding valuation, whichever brings out the highest figure of liability; "approved proportion" means the proportion which is approved by the Commissioner ("the officer appointed under;") as reasonable in the circumstances of the case. [Act No. 12 of 1987 , s. 11, Act No. 20 of 1989 , Sch., Act No. 12 of 1994 , s. 24, Act No. 4 of 2012 , s. 37, Act No. 50 of 2016 , s. 10.]
  4. 116

    TRANSFERS AND AMALGAMATIONS - 116. Further conditions for approval

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    Approval requires that the section was entered into before the date of the application.

    Section 116. Further conditions for approval Section was entered into before the date of the application; and
  5. 117

    TRANSFERS AND AMALGAMATIONS - 117. Approval or refusal

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    The Insurance Regulatory Authority may approve a scheme of amalgamation or transfer after considering deposited documents, reports and any representations; and must publish and send notice of its decision.

    Section 117. Approval or refusal Section 117(1) The Authority ("the Insurance Regulatory Authority established by;") may, after considering the documents and reports deposited with him under this Part and the representation, if any, made under section 114 (2), subject to such terms and conditions as he considers necessary, approve the scheme of amalgamation or transfer. Section 117(2)(a) publish a notice of his decision in the Gazette and in such other manner as he thinks fit; and Section 117(2)(b) send a copy of that notice to the parties to the amalgamation or the transferor and the transferee and every person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who made representations in accordance with the notice referred to in section 114 ,
  6. 118

    TRANSFERS AND AMALGAMATIONS - 118. Effect of approval undersection 117

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    Approval under section 117 can transfer the transferor's rights and obligations to the amalgamated insurer or transferee; a policy-holder whose policy is included is not bound by the instrument unless given written notice of its execution by either insurer.

    Section 118. Effect of approval undersection 117 Section 118(1)(a) to transfer to the amalgamated insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or the transferee all the transferor’s right and obligations under the policies included in the instruments; and Section 118(1)(b) if the instrument so provides, to secure the continuation by or against the amalgamated insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or the transferee of any legal proceedings by or against either party to the amalgamation or against the transferor which relate to those rights or obligations, Section 118(2) Except in so far as the Authority ("the Insurance Regulatory Authority established by;") may otherwise direct, a policy-holder whose policy is included in such an instrument shall not be bound by it unless he has been given written notice of its execution by either of the insurers involved in the amalgamation or transfer. Section 118(3)(a) statements of his respective assets and liabilities; and Section 118(3)(b) the documents under which the amalgamation or transfer was effected.

Part XII

INSOLVENCY AND WINDING UP

  1. 119

    INSOLVENCY AND WINDING UP - 119. Insurer defined for this Part

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    Defines "insurer" for this Part as a person registered under this Act who carries on insurance business and includes a reinsurer carrying on insurance business in Kenya.

    Section 119. Insurer defined for this Part Section In this Part " insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") " means an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on insurance business in Kenya.
  2. 120

    INSOLVENCY AND WINDING UP - 120. Voluntary liquidation

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    Insurers carrying on long term business cannot be liquidated voluntarily.

    Section 120. Voluntary liquidation Section An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") carrying on long term business cannot be liquidated voluntarily, despite Part VI of the Insolvency Act ( Cap. 53 ). [Act No. 19 of 2015 , s. 56.]
  3. 121

    INSOLVENCY AND WINDING UP - 121. Liquidation by thecourt

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    If someone other than the Commissioner applies for an insurer's liquidation, the applicant must serve a copy of the application on the Commissioner; once served the Commissioner becomes a party and is entitled to be heard.

    Section 121. Liquidation by thecourt Section 121(1) If an application for the liquidation of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is presented by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") other than the Commissioner ("the officer appointed under;") , the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") shall serve a copy of the application on the Commissioner ("the officer appointed under;") . Section 121(2) On being served with a copy such an application, the Commissioner ("the officer appointed under;") becomes a party to the proceedings and is entitled to be heard at the hearing of the application. [Act No. 19 of 2015 , s. 57.]
  4. 122

    INSOLVENCY AND WINDING UP - 122. Insolvency ofinsurer

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    An insurer is treated as unable to pay its debts if it fails to observe the section 41 requirements on margins of solvency.

    Section 122. Insolvency ofinsurer Section For the purpose of section 384 of the Insolvency Act ( Cap. 53 ), an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is taken to be unable to pay its debts if at any time the requirements of section 41 (which relate to margins of solvency) are not observed by the insurer. [Act No. 19 of 2015 , s. 58.]
  5. 123

    INSOLVENCY AND WINDING UP - 123. Application for the liquidation ofinsurerby thecourt

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    Section 123 lists grounds on which an application may be made for the court to liquidate an insurer, and defines "insurer" as a person registered under this Act who carries on insurance business and includes a reinsurer.

    Section 123. Application for the liquidation ofinsurerby thecourt Section 123(1)(a) as provided by section 19 (5) or 67 (3) of this Act; Section 123(1)(b) on the ground that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is unable to pay the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") 's debts within the meaning of section 384 of the Insolvency Act ( Cap. 53 ); Section 123(1)(c) on the ground that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is unable to fulfil the reasonable expectations of policy -holders or potential policy -holders; Section 123(1)(d) on the ground that it is just and equitable in the interests of the policy holders that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") should be wound up; Section 123(1)(e) on the ground that the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") has failed to pay tax that is due and outstanding; Section 123(1)(f) on any other ground prescribed by regulations made for the purposes of this section under section 180 of this Act. Section 123(2) Subsection (1) does not apply to an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") that is already being liquidated by the court ("the High Court;") . Section 123(3)(a) there are sufficient grounds for making the order; and Section 123(3)(b) it is just and equitable for the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to be liquidated. Section 123(3)(c) having failed to comply with a requirement of this Act, has continued that-failure; or Section 123(3)(c)(i) having failed to comply with a requirement of this Act, has continued that-failure; or Section 123(3)(c)(ii) having contravened a provision of this Act, has continued that contravention.
  6. 124

    INSOLVENCY AND WINDING UP - 124. Transfers of insurance businesses

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    Section 124. Transfers of insurance businesses Section 124(1) In this section — "transferee insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") " means the insurer ("a person,

    Section 124. Transfers of insurance businesses Section 124(1) In this section — "transferee insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") " means the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to which an insurance business (or part of it) is transferred as referred to in subsection (2); and "transferor insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") " means the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or insurers that have transferred that business or part. Section 124(2) If an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") transfers its insurance business , or any part of it, to another insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under an arrangement in accordance with which the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or its creditors have claims against the other insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , then, if the other insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is being liquidated by the court ("the High Court;") , the court ("the High Court;") shall, subject to the provisions of this section, order the transferor insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to be liquidated in conjunction with the other insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 124(3) The court ("the High Court;") may by the same or a subsequent order appoint the same person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to be liquidator for the two insurers and make provision for such other matters as the court ("the High Court;") considers necessary, with a view to the insurers being liquidated as if they were a single insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 124(4) The commencement of the liquidation of the transferee insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is, unless the court ("the High Court;") otherwise orders, the commencement of the liquidation of the transferor insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 124(5)(a) the constitution of the insurers; and Section 124(5)(b) the arrangements entered into between the insurers in the same manner as the court ("the High Court;") has regard to the rights and liabilities of different classes of contributories in the case of the liquidation of a single insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or as near as possible as the circumstances allow. Section 124(6) If the transferor insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is not in the process of being liquidated at the same time as the transferee insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , the court ("the High Court;") may order the liquidation of the transferor insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") only if satisfied, after hearing any objections that may made by or on behalf of that insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to its being liquidated, that it would be just and equitable for it to be liquidated. Section 124(7) An application may be made for the liquidation of the transferor insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in conjunction with the transferee insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") by any creditor of, or person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") interested in, either of the insurers. Section 124(8)(a) an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is the transferee insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in relation to one insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and as the transferor insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in relation to another insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; or Section 124(8)(b) several insurers are transferor insurers in relation to a single transferee insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ,
  7. 125

    INSOLVENCY AND WINDING UP - 125. Insurers that are subsidiaries of non-insurers

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    If an insurer that is a subsidiary of a non‑insurer has its parent liquidated under the Insolvency Act, the subsidiary may be liquidated only on the basis of a separate application for winding up.

    Section 125. Insurers that are subsidiaries of non-insurers Section 125(1) If an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") is a subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") of a company that is not an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") and the company is liquidated under the Insolvency Act ( Cap. 53 ), the subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") may be liquidated only on the basis of a separate application for winding up. Section 125(2)(a) all the admitted assets of the statutory funds; Section 125(2)(b) any other assets of the subsidiary ("a subsidiary company as defined by section 4 of the Companies Act ();") that have been included in a separate balance sheet relating to the long term insurance business ; Section 125(2)(c) any assets that, though not shown against the statutory funds or in that balance sheet, should in the opinion of the court ("the High Court;") be equitably apportioned to the long term policy holders. Section 125(3) The assets referred to in subsection (2) may be used for a purpose other than for the benefit of the long term insurance policy holders only if the rights of those policy holders have been fully satisfied or otherwise provided for. [Act No. 19 of 2015 , s. 61, Act No. 22 of 2017 , s. 16.]
  8. 126

    INSOLVENCY AND WINDING UP - 126. Evidence in proceedings for liquidation ofinsurer

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    When, at the hearing of a liquidation application made by the Commissioner, evidence shows the insurer was insolvent at the date of the last deposited accounts or at a date of a prior investigation, that evidence is, unless disproved, proof that the insurer continues to be unable to pay its debts.

    Section 126. Evidence in proceedings for liquidation ofinsurer Section 126(1) If, on the hearing of an application for liquidating an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") made by the Commissioner ("the officer appointed under;") under section 123 (1), evidence is given that the insurer was insolvent at the close of the period to which the accounts and balance sheet of the insurer last deposited under section 61 relate, or at any date as at which an investigation was last made under section 57 or 58 , is, unless the contrary is proved, evidence that the insurer continues to be unable to pay its debts. Section 126(2) Rules made under section 697 of the Insolvency Act ( Cap. 53 ) may regulate the procedure and the practice to be followed in proceedings with respect to the liquidation of insurers under this Act. [Act No. 19 of 2015 , s. 62.]
  9. 127

    INSOLVENCY AND WINDING UP - 127. Valuation of assets and liabilities

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    Liquidator must ascertain asset and liability values in a manner and on a basis he thinks fit; insurers' liabilities for general insurance policies must, as far as practicable, be the portion of the last premium proportionate to the unexpired policy; an actuary appointed under subsection (1) must take account of any special directions from the court when determining liabilities.

    Section 127. Valuation of assets and liabilities Section 127(1)(a) the value of the assets and liabilities shall be ascertained in such manner and upon such basis as the liquidator thinks fit; Section 127(1)(b) the liabilities of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of the current policies of long term insurance business shall, as far as practicable, be calculated by the method and upon the basis to be determined by an actuary appointed by the court ("the High Court;") ; Section 127(1)(c) the liabilities of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in respect of current policies of general insurance business ("insurance business of any class or classes not being long term insurance business;") shall, as far as practicable, be such portion of the last premium ("the consideration for the granting of an annuity;") paid as is proportionate to the unexpired portion of the policy in respect of which the premium ("the consideration for the granting of an annuity;") was paid. Section 127(2) The actuary appointed under subsection (1) shall, in the determination of liabilities, take into account any special directions which may be given to him by the court ("the High Court;") .
  10. 128

    INSOLVENCY AND WINDING UP - 128. Continuation of business ofinsurerin liquidation

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    Liquidator must, unless the High Court orders otherwise, carry on an insurer's business to transfer it as a going concern; may vary existing insurance contracts but must not make new ones; may apply for appointment of a special manager; Court may appoint a special manager, require security, order remuneration and may reduce contract amounts; liquidator must keep beneficial ownership records for at least seven years after dissolution.

    Section 128. Continuation of business ofinsurerin liquidation Section 128(1) The liquidator shall, so far as it may be possible and unless the court ("the High Court;") otherwise orders, carry on the insurance business of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") with a view to it being transferred as a going concern to another insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , whether an existing company or a company formed for the purpose; and, in carrying on that business, the liquidator may agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance. Section 128(2) If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") attributable to his business require the appointment of a special manager of the business, he may apply to the court ("the High Court;") , and the court ("the High Court;") may on the application appoint a special manager of that business to act during such time as the Court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the court ("the High Court;") . Section 128(3) The Court may require the special manager to give such security as it considers necessary. Section 128(4) The Court may make such order as it considers appropriate with regard to the payment of remuneration to the special manager. Section 128(5) The Court may, subject to such conditions (if any) as it may determine, reduce the amount of the contracts made by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in the course of carrying on his business as an alternative to winding up or otherwise. Section 128(6) The liquidator shall maintain information and records on the beneficial ownership of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for at least seven years after the date on which the company is dissolved. [Act No. 10 of 2023 , Sch.]

Part XIII

THE KENYA REINSURANCE CORPORATION

  1. 129

    THE KENYA REINSURANCE CORPORATION - 129.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 129 was repealed by Act No. 7 of 1997, s. 15.

    Section 129.[Repealed by ActNo. 7 of 1997, s. 15.]
  2. 130

    THE KENYA REINSURANCE CORPORATION - 130.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 130 was repealed by ActNo. 7 of 1997, s. 15.

    Section 130.[Repealed by ActNo. 7 of 1997, s. 15.]
  3. 131

    THE KENYA REINSURANCE CORPORATION - 131.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 131 has been repealed.

    Section 131.[Repealed by ActNo. 7 of 1997, s. 15.]
  4. 132

    THE KENYA REINSURANCE CORPORATION - 132.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 132 has been repealed by Act No. 7 of 1997, s. 15.

    Section 132.[Repealed by ActNo. 7 of 1997, s. 15.]
  5. 133

    THE KENYA REINSURANCE CORPORATION - 133.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 133 was repealed by ActNo. 7 of 1997, s. 15.

    Section 133.[Repealed by ActNo. 7 of 1997, s. 15.]
  6. 134

    THE KENYA REINSURANCE CORPORATION - 134.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 134 has been repealed by ActNo. 7 of 1997, s. 15.

    Section 134.[Repealed by ActNo. 7 of 1997, s. 15.]
  7. 135

    THE KENYA REINSURANCE CORPORATION - 135.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 135 was repealed by ActNo. 7 of 1997, s. 15.

    Section 135.[Repealed by ActNo. 7 of 1997, s. 15.]
  8. 136

    THE KENYA REINSURANCE CORPORATION - 136.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 136 has been repealed.

    Section 136.[Repealed by ActNo. 7 of 1997, s. 15.]
  9. 137

    THE KENYA REINSURANCE CORPORATION - 137.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 137 was repealed by Act No. 7 of 1997, s. 15.

    Section 137.[Repealed by ActNo. 7 of 1997, s. 15.]
  10. 138

    THE KENYA REINSURANCE CORPORATION - 138.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 138 was repealed by Act No. 7 of 1997, s. 15.

    Section 138.[Repealed by ActNo. 7 of 1997, s. 15.]
  11. 139

    THE KENYA REINSURANCE CORPORATION - 139.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 139 repealed.

    Section 139.[Repealed by ActNo. 7 of 1997, s. 15.]
  12. 140

    THE KENYA REINSURANCE CORPORATION - 140.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 140 has been repealed by Act No. 7 of 1997, s. 15.

    Section 140.[Repealed by ActNo. 7 of 1997, s. 15.]
  13. 141

    THE KENYA REINSURANCE CORPORATION - 141.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    This section has been repealed.

    Section 141.[Repealed by ActNo. 7 of 1997, s. 15.]
  14. 142

    THE KENYA REINSURANCE CORPORATION - 142.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    This section has been repealed.

    Section 142.[Repealed by ActNo. 7 of 1997, s. 15.]
  15. 143

    THE KENYA REINSURANCE CORPORATION - 143.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 143 was repealed by ActNo. 7 of 1997, s. 15.

    Section 143.[Repealed by ActNo. 7 of 1997, s. 15.]
  16. 144

    THE KENYA REINSURANCE CORPORATION - 144.[Repealed by ActNo. 7 of 1997, s. 15.]

    Verify source ↗

    Section 144 was repealed by ActNo. 7 of 1997, s. 15.

    Section 144.[Repealed by ActNo. 7 of 1997, s. 15.]

Part XIV

MANDATORY REINSURANCE CESSIONS

  1. 145

    MANDATORY REINSURANCE CESSIONS - 145. Certain business to be ceded toKenya Reinsurance Corporation

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    Insurers must cede specified proportions of insurance and certain reinsurance business to the Kenya Reinsurance Corporation Limited, subject to the Act and prescribed terms.

    Section 145. Certain business to be ceded toKenya Reinsurance Corporation Section 145(1) Subject to this Act, every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall re-insure with the Kenya Reinsurance Corporation Limited such proportion of each policy of insurance issued or renewed in Kenya by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , in such proportion and in such manner and subject to such terms and conditions as are prescribed. Section 145(2) Subject to this Act, every insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall also place with the Company ("the Kenya Reinsurance Corporation Limited;") , in addition to the reinsurance specified under subsection (1), such proportion of its reinsurance business ("the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;") from Kenya placed in the international reinsurance market, excluding facultative reinsurance, in such proportion and in such manner and subject to such terms and conditions as are prescribed. [Act No. 7 of 1997 , s. 16.]
  2. 146

    MANDATORY REINSURANCE CESSIONS - 146. Power to decline business

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    The Kenya Reinsurance Corporation Limited may refuse reinsurance offered under this Part and must furnish reasons to the insurer if requested; an insurer may appeal to the Tribunal within fourteen days after receiving reasons, and the Tribunal may confirm the refusal or direct the Company to accept the reinsurance; where reinsurance is refused any liability of the insurer in respect of that reinsurance shall cease.

    Section 146. Power to decline business Section 146(1) The Company ("the Kenya Reinsurance Corporation Limited;") may refuse to accept any reinsurance offered pursuant to this Part, and in that case the Company ("the Kenya Reinsurance Corporation Limited;") shall furnish the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") concerned, if so requested, the reasons for its refusal. Section 146(2) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") may, within fourteen days after receiving reasons for refusal under this section, appeal to the Tribunal ("the tribunal established under;") against the refusal, and thereupon the Tribunal ("the tribunal established under;") may confirm the refusal or may direct the Company ("the Kenya Reinsurance Corporation Limited;") to accept the reinsurance concerned, and any decision of the Tribunal ("the tribunal established under;") on an appeal shall be final and conclusive. Section 146(3) Where reinsurance is refused under this section any liability of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") under this Part in respect of that reinsurance shall cease. [Act No. 7 of 1997 , s. 17.]
  3. 147

    MANDATORY REINSURANCE CESSIONS - 147. Payment

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    Insurers must pay the Kenya Reinsurance Corporation Limited for reinsurance under this Part within the period the Cabinet Secretary prescribes by Gazette notice.

    Section 147. Payment Section Payment by insurers to the Company ("the Kenya Reinsurance Corporation Limited;") in respect of reinsurance effected under this Part shall be made within such period as the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may, by notice in the Gazette , prescribe. [Act No. 5 of 1998 , s. 55, Act No. 19 of 2015 , s. 63.]
  4. 148

    MANDATORY REINSURANCE CESSIONS - 148. Returns and information

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    Insurers required to effect reinsurance under this Part must produce or submit specified returns, documents and furnish information to the Kenya Reinsurance Corporation Limited.

    Section 148. Returns and information Section An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") required to effect reinsurance under this Part shall produce or submit to the Company ("the Kenya Reinsurance Corporation Limited;") all returns, statements, books, records, accounts or other documents, or true copies thereof, and shall furnish any information, which may be required by the Company ("the Kenya Reinsurance Corporation Limited;") for the purposes of this Part. [Act No. 7 of 1997 , s. 18.]
  5. 149

    MANDATORY REINSURANCE CESSIONS - 149. Offences and penalty

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    Failure to effect reinsurance or to make any payment as required by or under this Part is an offence subject to penalty.

    Section 149. Offences and penalty Section fails to effect reinsurance or make any payment as, and in such manner as, is required by or under this Part;

Part XIX

CABINET SECRETARY’S POWERS

  1. 179

    CABINET SECRETARY’S POWERS - 179. Policyholders’ Compensation Fund

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    The Cabinet Secretary must establish a Policyholders' Compensation Fund to compensate claimants of insurers placed under statutory management or whose licence is cancelled, and must appoint a Board to manage the Fund; the Cabinet Secretary may require monthly contributions and prescribe penalties for late payment.

    Section 179. Policyholders’ Compensation Fund Section 179(1) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") shall, for the protection of policyholders, establish a Policyholders' Compensation Fund, in this section referred to as "the Fund", to provide compensation to the claimants of insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") placed under a manager appointed under section 67C (2) or whose license has been cancelled under the Act. Section 179(2) Where a Fund is established under subsection (1), the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") shall appoint a Board ("the Board of Directors of the Authority constituted under;") of Trustees, in this section referred to as "the Board ("the Board of Directors of the Authority constituted under;") ", for the management and administration of the Fund. Section 179(2A)(a) provide compensation to claimants of insurers as provided under subsection (1); Section 179(2A)(b) monitor, in consultation with the Commissioner ("the officer appointed under;") where necessary, the risk profile of any insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") ; Section 179(2A)(c) advise the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") on the national policy to be followed with regard to matters relating to compensation of policyholders and to implement all government policies relating thereto; and Section 179(2A)(d) participate in the statutory management of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") placed under statutory management by the regulator; Section 179(2A)(e) liquidate an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") as may be ordered by a court ("the High Court;") ; Section 179(2A)(f) perform such other functions as may be conferred on it by this Act or by any other written law. Section 179(2B)(a) control, supervise and administer the assets and liabilities of the Fund in such manner and for such purposes as best promote the interests of policyholders; Section 179(2B)(b) employ such persons and engage the services of such consultants as may be necessary, on such terms and conditions for the proper and efficient exercise of its functions; Section 179(2B)(c) enter into association with such other bodies or organizations, within or outside Kenya, as it may consider desirable or appropriate in furtherance of the purposes for which the Fund is established; Section 179(2B)(d) invest any of its surplus funds in securities which for the time being trustees may by law invest in, or in any other securities which the Treasury may, from time to time, approve; Section 179(2B)(e) receive contributions paid by insurers and policyholders, grants provided by Parliament, gifts, donations or endowments on behalf of the Fund and make legitimate disbursements therefrom; Section 179(2B)(f) subject to the provisions of this Act, regulate its own procedure. Section 179(3)(a) suing and being sued; Section 179(3)(b) taking, purchasing or otherwise acquiring, holding, charging or disposing of movable or immovable property; Section 179(3)(c) borrowing or lending money; and Section 179(3)(d) doing or performing all such other acts necessary for the proper performance of its functions under this Act which may lawfully be done or performed by a body corporate. Section 179(4)(a) a Chairperson, appointed by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") ; Section 179(4)(b) the Commissioner ("the officer appointed under;") of Insurance or a representative appointed in writing; Section 179(4)(c) the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") responsible for matters relating to finance or a representative appointed in writing; Section 179(4)(d) the Attorney-General or a representative appointed in writing; Section 179(4)(e) one person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") nominated by the body representing the interests of insurers; Section 179(4)(f) one person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") nominated by insurance brokers; Section 179(4)(g) one person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") representing the general public appointed by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") ; and Section 179(4)(h) the Managing Trustee as an ex officio member without a right to vote. Section 179(4A) The chairperson and the members appointed under paragraphs 4 (e), (f) and (g) may be appointed from amongst persons who have knowledge or experience in matters relating to insurance, finance, law, accounting, banking or actuarial science. Section 179(4B)(a) has at any time been convicted of any offence involving fraud, theft, dishonesty, breach of trust or moral turpitude; Section 179(4B)(b) was previously involved in the management or administration of a financial institution which was deregistered, wound up or placed under statutory management for any failure on the part of the management or the administration thereof; Section 179(4B)(c) is a director ("a person occupying the position of a director by whatever name he may be called;") , officer, employee or shareholder of any insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , insurance agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") or any other member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") ; or Section 179(4B)(d) is disqualified under any other written law from holding public office or being a director ("a person occupying the position of a director by whatever name he may be called;") of any institution. Section 179(5) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") shall prescribe the qualifications and terms of service of the chairperson and members of the Board ("the Board of Directors of the Authority constituted under;") , including the procedure for their appointment. Section 179(5A) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") shall, in consultation with the Board ("the Board of Directors of the Authority constituted under;") , appoint a Managing Trustee who shall be the chief executive and secretary to the Board ("the Board of Directors of the Authority constituted under;") , and who shall hold office for such period and on such terms and conditions of service as may, from time to time be determined in writing by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") in consultation with the Board ("the Board of Directors of the Authority constituted under;") . Section 179(6) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may require payment of a monthly contribution to the Fund to be paid by every policy-holder and insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , in such amount and at such times as the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may, in consultation with the Board ("the Board of Directors of the Authority constituted under;") , prescribe. Section 179(7) A contribution required under subsection (6) shall be remitted to the Board ("the Board of Directors of the Authority constituted under;") by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , in such manner as may be prescribed. Section 179(8) If an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") , for any reason, fails to pay its contribution to the Board ("the Board of Directors of the Authority constituted under;") within the prescribed period, the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall be liable to pay to the Board ("the Board of Directors of the Authority constituted under;") a penalty interest charge, which shall be prescribed by the Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") in consultation with the Board ("the Board of Directors of the Authority constituted under;") . Section 179(9)(a) the Board ("the Board of Directors of the Authority constituted under;") shall hold the directors of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who has defaulted in remitting a statutory contribution to be severally and jointly liable for the payment of the outstanding contribution together with the applicable interest; and; Section 179(9)(b) the liability of the directors shall commence on the expiry of ninety days from the due date of the outstanding statutory contribution. Section 179(10) A contribution paid by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") to the Board ("the Board of Directors of the Authority constituted under;") may be treated as an item of the expenses of management of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") for the financial year ("the calendar year;") in which the amount is paid. Section 179(11) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may, in consultation with the Board ("the Board of Directors of the Authority constituted under;") , make regulations generally for the better carrying out the provisions of this section. [Act No. 6 of 2005 , s. 41, Act No. 11 of 2006 , s. 21, Act No. 8 of 2008 , s. 63, Act No. 10 of 2010 , s. 61, Act No. 1 of 2014 , s. 18, Act No. 19 of 2015 , s. 67.]
  2. 179A

    CABINET SECRETARY’S POWERS - 179A. Protection from personal liability

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    Certain Board members and persons acting under their direction are exempt from personal liability for acts done bona fide in executing the Board’s functions, powers or duties under this Act.

    Section 179A. Protection from personal liability Section No matter or thing done by a member of the Board ("the Board of Directors of the Authority constituted under;") , the secretary to the Board ("the Board of Directors of the Authority constituted under;") , or an officer, employee or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") of the Board ("the Board of Directors of the Authority constituted under;") shall, if the matter or thing is done bonafide for executing the functions, powers, or duties of the Board ("the Board of Directors of the Authority constituted under;") under this Act, render the member, secretary, officer, employee or agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") , or any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") acting on their direction personally liable to any action, claim, or demand whatsoever. [Act No. 10 of 2010 , s. 62.]
  3. 180

    CABINET SECRETARY’S POWERS - 180. Power ofCabinet Secretaryto makeregulationsfor purposes of this Act

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    The Cabinet Secretary may make regulations for matters required or permitted by this Act and for matters necessary, desirable or convenient to give effect to the Act.

    Section 180. Power ofCabinet Secretaryto makeregulationsfor purposes of this Act Section 180(1) The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may make regulations providing for all matters that are required or permitted to be prescribed by this Act, or that are necessary, desirable or convenient to be prescribed for giving effect to this Act. Section 180(1A)(a) mitigation of group risk; and Section 180(1A)(b) prudential regulation of insurance groups.
  4. 181

    CABINET SECRETARY’S POWERS - 181. Power of exemption

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    The Cabinet Secretary may, by notice in the Gazette and subject to terms and conditions on the advice of the Board, exempt any person from any of the provisions of this Act.

    Section 181. Power of exemption Section The Cabinet Secretary ("the Cabinet Secretary for the time being responsible for the National Treasury;") may, by notice in the Gazette , subject to such terms and conditions as he may on the advice of the Board ("the Board of Directors of the Authority constituted under;") specify, exempt any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") from any of the provisions of this Act. [Act No. 11 of 2006 , s. 22, Act No. 19 of 2015 , s. 69.]

Part XV

INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS

  1. 150

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 150. Only licensed brokers, agents, risk managers, motor assessors, insuranceinvestigator, loss adjusters, insurance surveyor,medical insurance providerand claims setting agents to carry on business

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    After three months from the appointed date, only persons licensed under the Act may commence, transact or carry on business as brokers, agents, risk managers, motor assessors, insurance investigators, loss adjusters, insurance surveyors, medical insurance providers or claims settling agents; using those names in a way that implies licensure is also prohibited; limited continuance is permitted to complete pre-appointed-date assignments; contravention is an offence with fines or imprisonment.

    Section 150. Only licensed brokers, agents, risk managers, motor assessors, insuranceinvestigator, loss adjusters, insurance surveyor,medical insurance providerand claims setting agents to carry on business Section 150(1) No person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall, after the expiry of three months from the appointed date ("the date specified infor the coming into force of this Act;") , commence, transact or carry on in Kenya the business of a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") , risk manager ("a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;") , motor assessor, insurance investigator ("the Commissioner or an investigator appointed under;") , loss adjuster , insurance surveyor, medical insurance provider ("an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;") , or claims settling agent ("a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;") unless he is licensed under this Act. Section 150(2) No person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall, after the expiry of three months from the appointed date ("the date specified infor the coming into force of this Act;") , use the name of broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") , risk manager ("a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;") , motor assessor, insurance investigator ("the Commissioner or an investigator appointed under;") , loss adjuster , insurance surveyor, medical insurance provider ("an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;") or claims settling agent ("a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;") in a manner to give the impression that he is licensed to commence, transact or carry on any such business, unless he is so licensed. Section 150(3) Nothing in this Act shall prohibit or otherwise render unlawful the continuance of the business of a risk manager ("a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;") , motor assessor, insurance investigator ("the Commissioner or an investigator appointed under;") , loss adjuster , insurance surveyor, medical insurance provider ("an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;") or claims settling agent ("a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;") in Kenya in so far as it is necessary to complete any assignment which was undertaken before the appointed date ("the date specified infor the coming into force of this Act;") . Section 150(4) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes the provisions of this section shall be guilty of an offence and liable to a fine not exceeding fifty thousand shillings and, if the offence is a continuing one, to a further fine not exceeding one thousand shilling for every day during which the offence continues or to imprisonment for a term not exceeding one month or both. [Act No. 9 of 2003 , s. 13, Act No. 9 of 2007 , s. 60, Act No. 22 of 2017 , s. 17, Act No. 10 of 2023 , Sch, Act No. 18 of 2023 , s. 5.]
  2. 150A

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 150A. Licencing of medical insurance providers

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    Persons placing medical insurance business for commission must apply to the Insurance Regulatory Authority for a licence as a medical insurance provider.

    Section 150A. Licencing of medical insurance providers Section 150A(1) Every person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") engaged in the business of placing medical insurance business with an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") in expectation of payment by way of a commission, fee, or other remuneration shall apply to the Authority ("the Insurance Regulatory Authority established by;") for licensing as a medical insurance provider ("an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;") under this Act. Section 150A(2) Subject to this Act, the provisions of this Act or of any regulation made thereunder with respect to the registration and regulation of brokers, shall, mutatis mutandis , apply to medical insurance providers. [Act No. 9 of 2003 , s. 14, Act No. 10 of 2010 , s. 57, Act No. 10 of 2023 , Sch.]
  3. 151

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 151. Application for Licensing

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    Registered agents must seek appointment by an insurer before transacting business; no person may submit false or misleading statements in applications or documents; contravention is an offence punishable by a fine not exceeding five thousand shillings.

    Section 151. Application for Licensing Section 151(1)(a) where the application is for a license as a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , a professional indemnity policy of insurance in such form as may be prescribed and for such amount as may be prescribed whether as a single sum or according to a specific formula; Section 151(1)(b) deleted by ActNo. 14 of 2015, s. 31(a) ; Section 151(1)(c) a statement of business transacted in the preceding financial year ("the calendar year;") in the prescribed form; Section 151(1)(d) the prescribed fee; Section 151(1)(e) such other documents as may be prescribed. Section 151(1A) Notwithstanding the provisions of subsection (1), a registered agent ("a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;") shall seek to be appointed by an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") before transacting business on their behalf. Section 151(2) No person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall make a statement in an application, account, written information or document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") submitted under this section that is false or misleading. Section 151(3) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes the provisions of subsection (2) shall be guilty of an offence and liable to a fine not exceeding five thousand shillings. [Act No. 14 of 2015 , s. 31, Act No. 10 of 2023 , Sch.]
  4. 152

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 152. Disqualifications

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    “Applicant” is defined as "a person applying for license, renewal of license or alteration of license under this Act;"

    Section 152. Disqualifications Section the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") has been found to be of unsound mind by a court ("the High Court;") of competent jurisdiction;
  5. 153

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 153. Licensing and re-licensing

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    Sets criteria and transitional requirements for licensing, renewal and re-licensing of intermediaries and related insurance actors, including eligibility criteria (paragraphs (1)(a)–(i)), citizen/shareholding requirements (subsection (2)), and transitional capital and shareholding compliance schedules for existing brokers (subsections (3)–(4)).

    Section 153. Licensing and re-licensing Section 153(1)(a) the volume of business which is likely to be available to, and the earning prospects of, an applicant ("a person applying for license, renewal of license or alteration of license under this Act;") are adequate; Section 153(1)(b) the business in respect of which the application is made will be conducted in accordance with accepted professional standards; Section 153(1)(c) in the case of a corporate person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") the financial standing of the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") is sound; Section 153(1)(d) the knowledge, skill and experience of the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") or, in the case of a corporate person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , the knowledge, skill and experience of the principal officer ("an officer appointed under;") in Kenya, are adequate; Section 153(1)(e) in the case of a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , the professional indemnity policy of insurance is satisfactory; Section 153(1)(f) the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") is not disqualified under this Act; Section 153(1)(g) the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") is, and is likely to continue to be, able to comply with such of the provisions of this Act and regulations and directions made or issued under this Act as are applicable to the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") ; Section 153(1)(h) the prescribed fee has been paid; Section 153(1)(i) it is otherwise in the public interest that the applicant ("a person applying for license, renewal of license or alteration of license under this Act;") should be licensed, Section 153(2)(a) by Kenya citizens; Section 153(2)(b) by a partnership whose partners are all citizens of Kenya; or Section 153(2)(c) by a corporate body whose shares are wholly owned by citizens of Kenya or which is wholly owned by the Government. Section 153(3) A broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") already carrying on business as an insurance broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") on the appointed date ("the date specified infor the coming into force of this Act;") without complying with the provisions of subsection (2) relating to paid up capital may be licensed as a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , but at the time of each subsequent renewal of the registration until he complies fully with the requirement his registration shall not be renewed unless he has acquired after the immediately preceding licensing or renewal of a license, as the case may be, paid up capital or additional paid up capital equal to not less than one-third of the deficiency which existed on the appointed date ("the date specified infor the coming into force of this Act;") . Section 153(4) Subject to subsection (3), a broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") already carrying on business as an insurance broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") on the appointed date ("the date specified infor the coming into force of this Act;") without complying with the minimum shareholding by Kenya citizens as required under subsection (2) shall comply with that requirement before the expiry of three years from the appointed date ("the date specified infor the coming into force of this Act;") . Section 153(5) Deleted by ActNo. 1 of 2014, s. 14(b) . [Act No. 18 of 1986 , Sch., Act No. 4 of 1999 , s. 73, Act No. 10 of 2010 , s. 59, Act No. 1 of 2014 , s. 14, Act No. 19 of 2015 , s. 64, Act No. 10 of 2023 , Sch.]
  6. 154

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 154. Business by agents

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    An agent may enter into a contract that allows them to solicit or procure insurance business for more than one insurer, subject to the terms of their agreement or appointment letter referred to in section 151(1)(b).

    Section 154. Business by agents Section Subject to the terms and conditions contained in the agreement or appointment letter referred to in section 151 (1)(b), an agent may enter into a contract which has the effect of enabling him to solicit or procure insurance business of the same class or sub-class of insurance business or other classes of insurance business for more than one insurer, or to solicit or procure insurance business of the same class or sub-class of insurance business for more than one insurer. [Act No. 9 of 2003 , s. 16, Act No. 11 of 2006 , s. 16.]
  7. 155

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 155. Returns

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    Registered corporate persons must furnish audited accounts, statements and returns as required by the Commissioner; failure to submit returns within the prescribed period incurs a penalty of ten thousand shillings plus one thousand shillings per day.

    Section 155. Returns Section 155(1) Every corporate person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") registered under this Part shall furnish such audited accounts, statements and returns relating to its business at such time and in such form as may be required by the Commissioner ("the officer appointed under;") . Section 155(2)(a) require further information, which shall be certified ("certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;") , if he so directs, by an auditor or other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , as he may consider necessary; or Section 155(2)(b) require any document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") for his examination. Section 155(3)(a) a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed under this Part fails to comply with a requirement made under subsection (2); or Section 155(3)(b) the Commissioner ("the officer appointed under;") is not satisfied as to the truth or accuracy of any account, statement or return supplied under subsection (1), or of any further information or document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") supplied under subsection (2), and has in writing so informed the person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") licensed, giving his reasons, Section 155(4) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who fails to submit a return within the prescribed period shall be liable to a penalty of ten thousand shillings and a further penalty of one thousand shillings for each day after the expiry of the prescribed period that the return is not submitted. Section 155(5) The penalty referred to in subsection (4) shall be payable into the Policyholders' Compensation Fund. [Act No. 28 of 2019 , s. 6, Act No. 10 of 2023 , Sch.]
  8. 156

    INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS - 156. Advance payment of premiums

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    An insurer must not assume risk in Kenya until the premium payable is received; intermediaries must not receive premiums on behalf of an insurer; intermediaries who do so are liable to a penalty of 20% of the unremitted premium; officers or directors of such intermediaries committing the offence are liable on conviction to a fine not exceeding KSh.100,000 or up to three months' imprisonment or both; insurers must pay commission to intermediaries within 30 days of receipt of premium; insurers who fail to do so are liable to a penalty of KSh.5,000,000.

    Section 156. Advance payment of premiums Section 156(1) No insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall assume a risk in Kenya in respect of insurance business unless and until the premium ("the consideration for the granting of an annuity;") payable thereon is received by the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 156(2) An intermediary ("a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;") shall not receive any premiums on behalf of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") . Section 156(3) An intermediary ("a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;") who contravenes subsection (2) shall be liable to a penalty equivalent to twenty percent of the unremitted premium ("the consideration for the granting of an annuity;") on each contravention, payable to the Policyholders' Compensation Fund. Section 156(4) Any officer or director ("a person occupying the position of a director by whatever name he may be called;") of an intermediary ("a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;") who contravenes subsection (2) shall be guilty of an offence, and upon conviction shall be liable to a fine not exceeding one hundred thousand shillings or to imprisonment for a term of three months, or to both. Section 156(5) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") shall pay an intermediary ("a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;") insurance commission due within thirty days upon receipt of premium ("the consideration for the granting of an annuity;") . Section 156(6) An insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") who contravenes subsection (5) shall be liable to a penalty of five million shillings on each contravention, payable to the Policyholders' Compensation Fund. [Act No. 12 of 1994 , s. 28, Act No. 8 of 1996 , s. 55, Act No. 4 of 1999 , s. 74, Act No. 11 of 2006 , s. 17, Act 9 of 2007 , s. 61, Act No. 10 of 2010 , s. 60, Act No. 11 of 2019 , s. 11.]

Part XVI

THE INSURANCE ADVISORY BOARD OF KENYA

  1. 157

    THE INSURANCE ADVISORY BOARD OF KENYA - 157.[Repealed by ActNo. 11 of 2006, s. 18]

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    Section 157 has been repealed.

    Section 157.[Repealed by ActNo. 11 of 2006, s. 18]
  2. 158

    THE INSURANCE ADVISORY BOARD OF KENYA - 158.[Repealed by ActNo. 11 of 2006, s. 18]

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    Section 158 (the provision numbered 158) has been repealed.

    Section 158.[Repealed by ActNo. 11 of 2006, s. 18]
  3. 159

    THE INSURANCE ADVISORY BOARD OF KENYA - 159.[Repealed by ActNo. 11 of 2006, s. 18]

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    Section 159 has been repealed by Act No. 11 of 2006, s. 18.

    Section 159.[Repealed by ActNo. 11 of 2006, s. 18]
  4. 160

    THE INSURANCE ADVISORY BOARD OF KENYA - 160.[Repealed by ActNo. 11 of 2006, s. 18]

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    Section 160: Repealed.

    Section 160.[Repealed by ActNo. 11 of 2006, s. 18]
  5. 161

    THE INSURANCE ADVISORY BOARD OF KENYA - 161.[Repealed by ActNo. 11 of 2006, s. 18]

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    Section 161 has been repealed.

    Section 161.[Repealed by ActNo. 11 of 2006, s. 18]
  6. 162

    THE INSURANCE ADVISORY BOARD OF KENYA - 162.[Repealed by ActNo. 11 of 2006, s. 18]

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    Section 162 was repealed by ActNo. 11 of 2006, s. 18.

    Section 162.[Repealed by ActNo. 11 of 2006, s. 18]
  7. 163

    THE INSURANCE ADVISORY BOARD OF KENYA - 163.[Repealed by ActNo. 11 of 2006, s. 18]

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    Section 163 was repealed.

    Section 163.[Repealed by ActNo. 11 of 2006, s. 18]

Part XVII

ADVERTISEMENTS AND STATEMENTS

  1. 164

    ADVERTISEMENTS AND STATEMENTS - 164. Misleading advertisements, etc. prohibited

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    Prohibits persons from using misleading or deceptive advertisements, statements, promises or forecasts to induce others into contracts relating to insurance; such conduct is an offence punishable by a fine not exceeding five thousand shillings.

    Section 164. Misleading advertisements, etc. prohibited Section 164(1) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who, by an advertisement, statement, promise or forecast which he knows to be misleading, false or deceptive, or by dishonest concealment of material facts, or by the reckless making (dishonestly or otherwise) of an advertisement, statement, promise or forecast which is misleading, false or deceptive, induces or attempts to induce another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") to enter into or offer to enter into a contract, transaction or arrangement with a member of the insurance industry ("an insurer,reinsurer,broker,agent, insurance surveyor,risk manager, loss assessor,loss adjuster and claims settling agent, whether registered under this Act or not;") relating to insurance business , shall be guilty of an offence and liable to a fine not exceeding five thousand shillings. Section 164(2) For the purpose of this section, including proceedings under this section, an advertisement, statement, promise or forecast issued by a person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") on behalf of or to the order of another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall be treated as an advertisement, statement, forecast or promise issued by that other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") . Section 164(3) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who in the ordinary course of his business issues and advertisement, statement, promise or forecast to the order of another person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") , being an advertisement, statement, promise or forecast the issue of which by that other person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") constitutes an offence under subsection (1) shall not himself be guilty of the offence if he proves that the matters contained in the advertisement were not (wholly or in part) devised or selected by him or by any person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") under his direction or control.
  2. 165

    ADVERTISEMENTS AND STATEMENTS - 165. Advertisements relating to capital

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    If an insurer or broker's advertisement states authorised capital, it must also state the amount subscribed and the amount paid up; failure is an offence punishable by a fine up to two thousand shillings.

    Section 165. Advertisements relating to capital Section 165(1) Where an advertisement, notice or other official publication of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") to whom this Act applies contains a statement of the amount of the authorized capital of the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , the publication shall also contain a statement of the amount of capital which has been subscribed and the amount paid up. Section 165(2) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes subsection (1) shall be guilty of an offence and liable to a fine not exceeding two thousand shillings.
  3. 166

    ADVERTISEMENTS AND STATEMENTS - 166. Issue of shares or debentures by companies

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    Companies and related persons must not publish offers of shares or debentures in respect of an insurer or broker (or proposed insurer or broker) unless the prospectus/notice is first submitted to and approved by the Commissioner; transfers or acquisitions of more than ten per cent of an insurer's paid-up capital or voting rights require the Commissioner's prior written approval (otherwise void); promoters must not accept offices of profit or pecuniary advantages except as provided in the prospectus; contravention is an offence punishable by a fine not exceeding two thousand shillings.

    Section 166. Issue of shares or debentures by companies Section 166(1) No person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall publish in respect of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") , or in respect of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") proposed to be formed, a prospectus, notice, circular, advertisement or other invitation offering to the public for subscription any shares in, or debentures of, the company or proposed company unless the prospectus, notice, circular, advertisement or other invitation is first submitted to and approved by the Commissioner ("the officer appointed under;") . Section 166(1A) No person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall transfer or dispose of and no person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") shall acquire more than ten per cent of the paid up share capital or voting rights of an insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") without the prior written approval of the Commissioner ("the officer appointed under;") ; and any such transfer, disposal or acquisition effected in a manner contrary to this subsection shall be null and void ab initio . Section 166(2) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") acting as promoter of a proposed insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") shall not accept an office of profit in the insurer ("a person, registered under this Act, who carries on insurance business and includes a reinsurer;") or broker ("an intermediary involved with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage commission for or on behalf of an insurer, policyholder or proposer for insurance or reinsurance and includes a medical insurance provider;") or the offer of a pecuniary advantage, other than as provided in the prospectus, notice, circular, advertisement or other invitation. Section 166(3) In this section— "debenture", in relation to a company, includes debenture stock, bonds, notes and any other document ("accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;") evidencing or acknowledging indebtedness of the company, whether constituting a charge on the property of the company or not; "share", in relation to a company, means a share in the capital of the company, and includes stock. Section 166(4) A person ("a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;") who contravenes the provisions of this section shall be guilty of an offence and liable to a fine not exceeding two thousand shillings. [Act No. 12 of 1994 , s. 32.]

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