The insurance sector in Kenya is regulated by the Insurance Regulatory Authority (IRA) under the Insurance Act (Cap 487). The IRA licenses and supervises insurance companies, reinsurers, brokers, agents, loss assessors, and other intermediaries.
Licensing Requirements
Separate licences apply for long-term insurance, general insurance, and composite business. Insurance intermediaries including brokers, agents, and bancassurance operators require separate licences. Brokers act for the insured and have fiduciary obligations to clients. Agents act for the insurer.
Policy Terms and Claims Handling
Insurers must include all exclusions and material terms in the policy document. Reliance on exclusions not prominently disclosed may be unenforceable. Claims must be handled fairly within the IRA’s regulatory timelines.
Utmost Good Faith
Insurance contracts are contracts of utmost good faith. The insured must disclose all material facts that would affect the insurer’s decision to accept the risk. Non-disclosure or misrepresentation entitles the insurer to void the policy. Courts scrutinise insurers who rely on technicalities to avoid legitimate claims.
Compulsory Motor Insurance
Third-party motor insurance is compulsory under the Insurance (Motor Vehicles Third Party Risks) Act. Claims from road accidents involving uninsured vehicles can be made against the Motor Vehicle Accident Victims Fund.
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