Kenya Insurance Act Cap 487

CHAPTER 487
INSURANCE ACT
ARRANGEMENT OF SECTIONS
PART I – PRELIMINARY
Section
1. Short title.
2. Interpretation.
PART II – THE INSURANCE REGULATORY AUTHORITY
3. Establishment of the Authority.
3A. Objects and functions of the Authority.
3B. Board of Directors.
3C. Powers of the Board.
3D. Remuneration of Board members.
3E. Commissioner of Insurance.
3F. Appointment of Secretary and other staff.
3G. Common seal of the Authority.
4. The Insurance Regulatory Authority Fund.
4A. Financial year and annual estimates.
4B. Accounts and audit.
4C. Supersession.
5. Particular duties of Commissioner.
6. Repealed.
7. Power to call for information and production of books or papers.
8. Examination of reinsurance treaties.
9. Directions and investigations.
10. Particular powers of Commissioner with regard to long term insurance business.
11. Investigations of associated persons.
12. Powers of investigator.
13. Protection for persons complying.
14. Person may be represented by an advocate.
15. Notes of examination of person.
16. Report of investigator.
17. Directions to person investigated.
18. Secrecy.
PART III – REGISTRATION OF INSURERS
19. Only authorized persons to carry on insurance business.
20. Placing of risks with insurers or reinsurers not registered under Act.
21. Closed fund business.
22. Prohibition of registration of certain persons.
23. Minimum capital requirements and holding by Kenya citizens.
24. Extension of time.
Section
25. Requirement as to capital structure and voting rights.
26. Provisions relating to the carrying on of both long term and general insurance
business.
27. One-third of boards to be citizens of Kenya.
27A. Qualifications of Board members.
28. Minimum assets in Kenya.
29. Appropriate reinsurance arrangements.
30. Application for registration.
30A. Opening of a branch.
31. Registration.
PART IV – DEPOSITS
32. Deposits.
33. Return of deposits if unregistered.
34. Deposits to be kept by Bank on behalf of insurer.
35. Substitution of deposits.
36. Investment of amount deposited.
37. Variation of deposits.
38. Use of deposits.
39. Return of deposits.
40. Increase of deposits.
PART V – ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS
41. Margin of solvency.
42. Admitted assets.
43. Admitted liabilities.
44. Assessment of assets and liabilities.
45. Establishment of statutory fund.
46. Application of statutory fund.
47. Assets to be in the name of insurer.
48. Investment of assets.
49. Unsuitable investments.
50. Specified investments.
51. Restriction on mortgage, etc. of assets.
PART VI – ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL
INVESTIGATIONS
52. Separate accounts for each class.
53. Apportionment between classes.
54. Accounts and balance sheets.
55. Accounting records.
56. Audit and auditor’s certificate.
57. Actuarial investigation.
58. Actuarial valuations.
59. Returns.
60. Accounts and statements to be signed.
61. Submission of accounts and statements.
62. Further information.
63. Other reports.
64. Returns sufficient compliance with Companies Act.
65. Rectification of returns.
66. Penalty for false statements.
67. Penalty for failure to comply with requirements of Part.
PART VII – INSPECTION AND CONTROL OF INSURERS
67A. Inspection of insurers.
67B. Directions to person inspected.
67C. Power of the Commissioner to intervene in management.
67D Part to apply to unregistered and unauthorized persons.
67E. Power of inspector.
67F. Expenses under Part.
67G. Power to protect the assets of an insurer.
PART VII – MANAGEMENT AND EXPENSES
68. Approved principal officer to be appointed.
69. Directors, managers, employees and their remuneration.
70. Limitation of management expenses.
71. Restrictions on loans, advances, etc. by insurer.
72. Limitation on employment of managing agents.
PART VIII – RATES, POLICY TERMS AND CLAIMS SETTLEMENT
73. Restrictions on rebates, brokerage, etc.
74. Premium rates of life insurers.
75. Premium rates of general insurers.
76. Law applicable to contracts of insurance and place of payment.
76A. Insurance cover upon change of ownership of motor vehicle.
77. Defaults of insurer, broker or agent not to invalidate policy.
78. Avoidance of contracts for unlimited amounts.
79. Amounts and values in policies to be expressed in Kenya currency.
80. Proposal and policy documents not to be misleading.
81. Incorrect statements in proposals.
82. Effect of suicide or capital punishment on policy.
83. Particulars as to age of proposer for life assurance.
84. Notice regarding proof of age.
85. Procedure where insurer declines to accept proof of age.
86. Misstatement of age.
87. Objections to and return of life policy.
88. Paid up policies.
89. Surrender of policies.
90. Non-forfeiture of ordinary life policies in certain cases of non-payment of premiums.
91. Non-forfeiture of industrial policies in certain cases of non-payment of premiums.
92. Treatment of debts on grant of paid up policies.
93. Certain policies exempted from operation of sections 88 to 92.
94. Insurable interest essential for all policies.
95. Property in child’s advancement policy.
96. Limitation of amount payable on death of child.
97. Production of prescribed certificate of death.
98. Savings as to insurable interest.
99. Protection of insured’s interests.
100. Family insurance policies.
101. Probate or administration may be dispensed with in certain cases.
102. Death of owner of policy not being life insured.
103. Insurer not bound to see to application of payments.
104. Power to pay into court.
105. No deductions in respect of other policies.
106. Lost policies.
PART IX – ASSIGNMENTS, MORTGAGES AND NOMINATIONS
107. Assignments of policies.
108. Effect of notice of trust.
109. Assignment of policy to insurer issuing it not to merge rights etc., under policy.
110. Policies held by trustees.
111. Nomination by policy-holder.
PART X – CLAIMS ON SMALL LIFE POLICIES
112. Claims on small life policies.
PART XI – TRANSFERS AND AMALGAMATIONS
113. Application to amalgamate or transfer.
114. Notice.
115. Conditions for approval in relation to long term insurance business.
116. Further conditions for approval.
117. Approval or refusal.
118. Effect of approval under section 117.
PART XII – INSOLVENCY AND WINDING UP
119. Insurer defined for this Part.
120. Voluntary liquidation.
121. Winding up by court.
122. Insolvency.
123. Petitions for winding up.
124. Secondary companies.
125. Insurers being subsidiaries of non-insurers.
126. Supplementary provisions as to winding up.
127. Valuation of assets and liabilities.
128. Continuation of business of insurer in liquidation.
PART XIII – THE KENYA REINSURANCE CORPORATION
129. Repealed.
130. Repealed.
131. Repealed.
132. Repealed.
133. Repealed.
134. Repealed.
135. Repealed.
136. Repealed.
137. Repealed.
138. Repealed.
139. Repealed.
140. Repealed.
141. Repealed.
142. Repealed.
143. Repealed.
144. Repealed.
PART XIV – MANDATORY REINSURANCE CESSIONS
145. Certain business to be ceded to Kenya Reinsurance Corporation.
146. Power to decline business.
147. Payment.
148. Returns and information.
149. Offences and penalty.
PART XV – INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS,
INSURANCE INVESTIGATOR LOSS ADJUSTERS, INSURANCE SURVEYORS
MEDICAL INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS
150. Only registered brokers, agents, risk managers, loss assessors, loss adjusters,
surveyors and claims settling agents to carry on business.
150A. Registration of medical insurance providers.
151. Application for registration.
152. Disqualifications.
153. Registration and re-registration.
154. Business by agents.
155. Returns.
156. Advance payment of premiums.
PART XVI – THE INSURANCE ADVISORY BOARD OF KENYA
157. Repealed.
158. Repealed.
159. Repealed.
160. Repealed.
161. Repealed.
162. Repealed.
163. Repealed.
PART XVII – ADVERTISEMENTS AND STATEMENTS
164. Misleading advertisements, etc., prohibited.
165. Advertisements relating to capital.
166. Issue of shares or debentures by companies.
167. Publication of returns.
168. Protection for official acts.
169. The Tribunal.
170. Powers of Tribunal.
171. Enforcement of orders for costs.
172. Penalty for disobedience of summons to give evidence, etc.
173. Appeals from Commissioner’s decisions.
174. Cognisance of offences and restrictions on institution of proceedings.
175. Criminal liability of directors, etc.
176. Criminal proceedings against unincorporated bodies.
177. Documents to be received in evidence.
178. General penalty.
PART XIX – MINISTER’S POWERS
179. Policy Holders’ Compensation Fund.
179A. Protection from personal liability.
180. Power to prescribe.
181. Power of exemption.
PART XX – GENERAL PROVISIONS RELATING TO REGISTRATIONS AND
CERTIFICATES
182. Interpretation of Part.
183. Register of authorized persons to be kept by Commissioner.
184. Notification of registered persons.
185. Inspection of registers.
186. Evidence of matters in register.
187. Alteration of registration.
188. Expiry and renewal of registration.
189. Issue, display and surrender of certificates.
190. Name of registered person.
191. Prohibition of other business.
192. Further information.
193. Alterations in particulars furnished.
194. False or misleading statements.
195. Refusal to register.
196. Cancellation of registration.
196A. Notification of cancellation of registration.
197. Records to be maintained by registered persons.
PART XXA – THE INSURANCE PREMIUM LEVY
197A. Imposition of Insurance Premium Levy.
PART XXB – INSURANCE TRAINING LEVY
197B. Imposition of Insurance Training Levy.
197C. Offences and penalties.
197D. Examination and production of documents.
197E. Regulations under Part XXA and Part XXB.
197F. Repealed.
197G. Repealed.
197H. Repealed.
197I. Repealed.
197J. Repealed.
197K. Repealed.
PART XXI – SUPPLEMENTARY PROVISIONS
198. Service of notice on registered persons.
199. Service of notice on policy-holder.
200. Conversion of currency.
201. Consent of Commissioner required for insurance.
202. Printing of documents.
203. Settlement of claims.
204. Appointment of public prosecutors.
SCHEDULES
FIRST SCHEDULE – PROVISIONS AS TO THE CONDUCT OF BUSINESS
AND AFFAIRS OF THE BOARD
SECOND SCHEDULE – MINIMUM CAPITAL REQUIREMENT