The future of insurance brokers and agents is uncertain after Kenya’s parliament passed a new law under the Insurance Act that states that “An intermediary shall not receive any premiums on behalf of an insurer.” Therefore, policyholders will have to pay premiums directly to the insurance providers.
The members of parliament passed the law after reports emerged accusing the brokers of delayed remittance of premiums paid by policyholders. The agents have also been accused of engaging in fraud. The Insurance Regulatory Authority noted that in the last quarter of 2018, the highest cases of fraud in the industry were by Insurance agents.
There are roughly 200 Insurance brokers and more than 10,000 Insurance agents in Kenya. The Brokers and agents act as intermediaries between policyholders and the insurance companies. They advise buyers on fairly priced insurance products, assist in creating risk management strategies, offer policies from different insurance companies, and collect premiums on behalf of insurance providers. The insurance intermediaries sold 81 per cent of the Life Business and 85 per cent of the General Business in Kenya as of 2016.
The Association of Insurance Brokers of Kenya are opposed to the move as it will lead to loss of business.