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, raised the share of reinsurance business that Kenyan insurers must place with Kenya Reinsurance Corporation. Insurers, brokers and reinsurance intermediaries need to understand the new cession rates and, just as importantly, what this instrument does not do. It is a cession measure, not a licensing-fee measure, and it should not be confused with fee proposals that may be discussed in the market.
What the regulations change
The amendment is made 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 reinsurance cessions. Two changes take effect.
First, Part A, paragraph 11, covering general business, is repealed and replaced. The earlier text required every insurer to reinsure with Kenya Reinsurance Corporation twenty per cent of each of its reinsurance treaties in respect of general business placed in the international reinsurance market. The new paragraph requires twenty-five per cent of each of its reinsurance treaties in respect of general business. Second, in Part B, paragraph 5(i), covering long term insurance, the percentage is raised from twenty per cent to twenty-five per cent.
Both paragraphs are made “for the purposes of section 145(2)” of the Insurance Act. That section requires every insurer to place with Kenya Reinsurance Corporation a prescribed proportion of its reinsurance business from Kenya placed in the international reinsurance market, excluding facultative reinsurance, on the prescribed terms.
Cession rates and the new end date
The older text of both paragraphs stopped applying on 31 December 2025 or on the date Kenya Reinsurance Corporation Limited is privatised, whichever came first. The amendment removes that calendar limb. The new Part A, paragraph 11 provides that the requirement ceases to apply on the date Kenya Reinsurance Corporation Limited is privatised, and the Part B amendment substitutes the same privatisation trigger for the date of 31 December 2025.
The practical effect for insurers is easy to state but not trivial to implement. A general insurer must now reinsure 25% of each of its general business reinsurance treaties with Kenya Re. For long term business, the 25% in Part B, paragraph 5(i) applies to the excess after the ceding company’s net retention, for policies reinsured on a risk premium basis, on the same terms and conditions offered to the most favoured reinsurer in that reinsurance. Sub-paragraph (ii) of the same paragraph was not touched by this instrument.
What the instrument does not change
Legal Notice No. 55 of 2026 amends only the Fifteenth Schedule, Part A paragraph 11 and Part B paragraph 5. It does not touch licensing or application fees, capital requirements or any other part of the Insurance Regulations. Reports of proposed changes to insurance licensing fees have been discussed in the market, but this instrument is not one of them, and this article does not rely on any such report because none has been verified against a gazetted text. If a fee-changing Legal Notice is gazetted, it will state the new fees and their effective date on its face.
The confusion is understandable, because several different instruments describe themselves as amendments to the Insurance Regulations. Advice given to a client should track which instrument is actually being asked about and should always be checked against the Legal Notice itself.
Related Duties in the Insurance Act
Section 145(1) of the Insurance Act separately requires every insurer to reinsure with Kenya Reinsurance Corporation Limited a prescribed proportion of each policy it issues or renews in Kenya, and section 145(2) covers the proportion of reinsurance business placed in the international market, excluding facultative reinsurance. Two further provisions matter in practice. Under section 146, the Corporation may refuse reinsurance offered to it and must give reasons if asked; the insurer may appeal to the Tribunal within fourteen days of receiving those reasons, and its liability for the reinsurance refused ceases. Section 149 makes it an offence for an insurer to fail to effect reinsurance or make payment as required, or to give false information in response to a requirement.
One drafting point deserves care. The pre-amendment Part A, paragraph 11 referred to treaties for general business “placed in the international reinsurance market”. The new paragraph 11 does not repeat those words, although it is still expressed to be made for the purposes of section 145(2). Insurers in doubt about the scope of the 25% on a particular treaty should ask the Corporation or the IRA to confirm its position in writing. The printed notice also calls the Insurance Act Cap. 387, whereas Kenya Law lists it as Cap. 487.
What insurers and brokers should do
General insurers should confirm that their reinsurance programme reflects the 25% cession to Kenya Re across their treaties in respect of general business, and should review treaty wordings accordingly. Long term insurers should check how the 25% applies to the excess over their net retention on risk premium reinsurance, and should confirm which of their treaties fall within paragraph 5(i) and which within paragraph 5(ii).
Because the end date is now tied to privatisation of Kenya Reinsurance Corporation Limited rather than a calendar date, insurers should not assume that the obligation will lapse on any particular day. 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 date on which the amendment took effect.
Compliance teams should also update any internal calendars, treaty checklists or board papers that treated 31 December 2025 as the date on which the cession would lapse, because that date no longer appears in the amended paragraphs. For each treaty, keep a short written record of the percentage applied and the basis on which it was calculated, so that the calculation can be produced if the IRA or Kenya Reinsurance Corporation Limited queries a placement.
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, and our note on IRA licensing in Kenya covers the licensing side. Contact our Regulatory & Compliance practice to review your reinsurance arrangements against the current Fifteenth Schedule requirements.
Sources: Insurance (Amendment) Regulations, 2025 (Legal Notice 55 of 2026); Insurance Act (Cap 487), sections 145, 146, 149 and 180; Insurance Regulations, Fifteenth Schedule, Parts A and B.
Frequently asked questions
What is the current mandatory reinsurance cession rate to Kenya Reinsurance Corporation?
Twenty-five per cent under Part A, paragraph 11 (general business, each reinsurance treaty) and twenty-five per cent under Part B, paragraph 5(i) (long term insurance, on the excess after net retention), following Legal Notice No. 55 of 2026. The earlier rate in both was twenty per cent.
When does the mandatory cession requirement end?
The amendment ties the end date to the date Kenya Reinsurance Corporation Limited is privatised, rather than to the earlier calendar date of 31 December 2025.
Does Legal Notice No. 55 of 2026 change insurance licensing fees?
No. It amends only the Fifteenth Schedule to the Insurance Regulations, Part A paragraph 11 and Part B paragraph 5.
Can Kenya Reinsurance Corporation refuse a cession?
Section 146 of the Insurance Act allows the Corporation to refuse reinsurance offered to it. If asked, it must give reasons, and the insurer may appeal to the Tribunal within fourteen days of receiving them.
Which section of the Insurance Act do these cessions rest on?
Section 145 of the Insurance Act, which obliges insurers to reinsure prescribed proportions with Kenya Reinsurance Corporation Limited. The Cabinet Secretary’s power to make the regulations is in section 180.
