The Insurance (Amendment) Regulations 2025, gazetted as Legal Notice No. 55 of 2026 and made on 31 December 2025 by the Cabinet Secretary for the National Treasury, changed how much of every general and life reinsurance placement Kenyan insurers must cede to Kenya Reinsurance Corporation. Insurers, brokers and reinsurance intermediaries need to understand the new cession rates and, just as importantly, need to know what this instrument does not do. It is not a fee-increase measure, despite that being how a proposed and still unenacted change to CMA-style licensing fees has sometimes been described in the same breath.
What the regulations change
The amendment falls under the Cabinet Secretary’s regulation-making power in section 180 of the Insurance Act (Cap 487) and amends the Fifteenth Schedule to the Insurance Regulations, which sets out the mandatory local reinsurance cession requirements. Two changes take effect. Part A, paragraph 11 of the Fifteenth Schedule, covering general (non-life) business, now fixes the mandatory cession to Kenya Reinsurance Corporation at a flat 25%. Part B, paragraph 5, covering life business, raises the cession rate from 20% to 25%. In both cases, the amendment also changes when the mandatory cession requirement lapses: rather than a fixed calendar date, the sunset is now tied to the date Kenya Reinsurance Corporation is privatised.
The practical effect for insurers is straightforward to state but not trivial to implement. A general insurer that had been ceding a graduated or lower percentage of its treaty and facultative reinsurance business to Kenya Re now cedes a flat 25%. A life insurer’s mandatory cession rises by five percentage points, from 20% to 25%. Both requirements will continue to apply for as long as Kenya Re remains state-owned, since the amendment removed the fixed end date that had previously given insurers a known point at which the obligation would lapse regardless of ownership changes at Kenya Re.
Why this is not the “fee increase” some clients have heard about
A separate and unrelated proposal has circulated in the market: reported increases to insurance licensing and application fees, for example an insurer licence fee rising from KES 150,000 to KES 500,000 and an insurance broker fee rising from KES 10,000 to KES 100,000. That proposal was reported by Business Daily Africa in October 2025 and has been referenced in other secondary commentary since. It is real in the sense that it has been proposed, but as of this writing it has not been enacted. No Legal Notice has been gazetted bringing those fee changes into force, and the Insurance Regulations currently in effect still reflect the pre-existing fee schedule. Insurers and brokers should budget for the possibility of a future fee increase, but should not treat it as current law, and should not confuse it with the reinsurance cession changes made by Legal Notice No. 55 of 2026, which is the instrument actually in force and actually gazetted under the title “Insurance (Amendment) Regulations 2025.”
The confusion is understandable. Both changes involve the word “amendment,” both concern the Insurance Regulations, and both surfaced in the same general period. But they are legally distinct: one is a gazetted, binding change to reinsurance cession rates; the other is an unenacted proposal to raise fees. Advice given to a client should track which one is actually being asked about.
What insurers and brokers should do
General and life insurers should confirm their current reinsurance programme reflects the new 25% mandatory cession to Kenya Re, and should review treaty documentation and facultative placement processes to ensure the cession is calculated correctly under the flat-rate structure rather than any prior graduated approach. Because the sunset clause is now tied to Kenya Re’s privatisation rather than a calendar date, insurers should not assume the obligation will lapse on any particular date; it will remain in force for as long as Kenya Re stays under state ownership. Reinsurance brokers structuring placements for Kenyan cedants should build the current 25% figure into placement slips and confirm the treatment with the Insurance Regulatory Authority (IRA) where a placement straddles the effective date of the amendment.
On the fee question, insurers and brokers should treat the reported figures as a planning signal rather than a compliance obligation. If and when a fee-increase instrument is actually gazetted, the applicable Legal Notice will specify the new fees and their effective date; until then, the fees set out in the currently consolidated Insurance Regulations remain payable.
How We Can Help
Clay & Associates Advocates advises insurers, reinsurers and brokers on regulatory compliance under the Insurance Act and IRA requirements. Our guide to insurance law and regulation in Kenya covers the wider regulatory framework these cession rules sit within. Contact our Regulatory & Compliance practice to review your reinsurance arrangements against the current Fifteenth Schedule requirements.
Sources: Insurance Act (Cap 487), section 180; Insurance (Amendment) Regulations 2025, Legal Notice No. 55 of 2026 (made 31 December 2025); Fifteenth Schedule to the Insurance Regulations, Parts A and B.
Frequently asked questions
What is the current mandatory reinsurance cession rate to Kenya Reinsurance Corporation?
25% for general (non-life) business under Part A, and 25% for life business under Part B, following the increase from 20% made by Legal Notice No. 55 of 2026.
When does the mandatory cession requirement end?
It is tied to the privatisation of Kenya Reinsurance Corporation rather than a fixed date, so it continues for as long as Kenya Re remains state-owned.
Have insurance licensing fees actually increased?
Not yet. Higher fees have been proposed and reported in the press, but no Legal Notice bringing a fee increase into force has been gazetted as of this writing; the current fee schedule under the Insurance Regulations remains in effect.
Does this amendment affect insurers’ existing reinsurance treaties immediately?
It applies from the amendment’s effective date; insurers should review current and upcoming treaty and facultative placements to confirm the cession is calculated at the new rate going forward.
