The Insurance Act now has provisions to protect policy holders in the event that an underwriter is in financial distress and its assets have been put under statutory management.
This follows the signing of The Insurance (Amendment) Bill 2019 into law.
Insurance Regulatory Authority (IRA) will thus be empowered to prescribe the manner of submission of various kinds of returns and provides for a penalty for late submission, which shall be payable to the Policyholders Compensation Fund.
Where an insurer fails to submit returns as prescribed, the insurer shall pay a penalty of KSh200,000 and a further penalty of KSh10,000 for each day after expiry of the period during which the document remains unsubmitted.
These new amendments to the Insurance Act come at a time when policyholders in many collapsed insurance firms, are yet to be compensated.
