AKI Wants Isurance Regulator Established

By Godfrey Tung'wet Posted 29 June 2006 @ 05:41 pm EET     Print     Reprint     E-Mail     Comments

NAIROBI (IBTimes.com) - The Association of Kenya Insurers (AKI) is calling upon the Government to accelerate the setting up of an Insurance Regulatory Authority to spearhead the amendment of the Insurance Act and to allow for ‘cash and carry’ rule in the industry.

The ‘cash and carry’ rule was among key proposals by the Finance Minister Amos Kimunya to improve the liquidity of the Insurers. The new rule requires brokers to remit premiums in respect of motor vehicles and fire insurance business to companies the same day they receive the cash.

The association has over the years demanded for the establishment of a regulatory authority to bring order in the industry

"As an industry we are glad that the Government has heeded to our persistent calls for setting up an authority to regulate the industry", AKI chairman Ben Wairegi said.

The minister was addressing concerns of motor vehicle insurers emanating from delay by brokers to remit premiums even though insurer assumed the risk immediately after brokers received premium payments.

"This cash and carry measure will improve the liquidity of insurers as well as minimise the risks of the money not being remitted by brokers," said Kimunya. However, AKI warns that it might face implementation hitches, partly due to resistance by brokers and the logistical issues with respect to cheque clearance.AKI praised this year’s budget for having addressed the industry concerns.

The Association cited the capping of third party accident compensation claims to a maximum of Sh3 million and a raft of tax incentives on life insurance as good for the industry.

The industry also welcomed to amendment of the Banking Act to allow for the introduction of new banking products subject to approval by the minister.