Kenya Regulation Brokers
Fourteen insurance brokers risk de-registration for holding onto premiums running into billions of shillings. The firms have failed to respond to inquiries from the Insurance Regulatory Authority (IRA) on the pending payments.
This is despite a circular sent out last year to 44 firms inquiring on the status of outstanding premiums and payment terms, reported The Star.
Last year, insurance brokers withheld about KES43bn ($403.5m) collected from customers but not remitted to underwriters as required. These included KES42bn and KES1bn for general insurers and life insurers respectively, which is about 19.8% of the KES216.2bn gross premiums underwritten in 2018.
In February this year, 82 brokerage firms were denied operating licences for failing to remit outstanding premiums. There were 221 insurance broking firms in the country at the end of last year.
A number have proposed payment plans, the IRA said.
In the event a brokerage firm ceases operations, claimants can be paid using the KES3m minimum bank guarantee furnished by the broker.
At the same time, the regulator has asked insurers to clear commissions owed to insurance agents.
There are over 10,000 insurance agents who account for 70% of the average KES220bn on annual underwriting in the sector.
Middle East Insurance Review