The Insurance Regulatory Authority (IRA) is the statutory regulator for Kenya’s insurance industry under the Insurance Act (Cap 487). No person may carry on insurance business, act as an insurance agent, operate as an insurance broker, or provide loss assessor services in Kenya without a valid IRA licence. The Insurance Act prescribes strict licensing requirements and extensive ongoing compliance obligations that every participant in Kenya’s insurance sector must understand before commencing operations.

The Insurance Act and IRA Mandate

The Insurance Act establishes the IRA with powers to register insurers, brokers, agents, and other industry participants; supervise the financial soundness of insurers; regulate insurance premiums and policy terms; and protect policyholders. The IRA operates under a risk-based supervision framework aligned with International Association of Insurance Supervisors (IAIS) core principles. Kenya’s insurance regulatory framework was significantly strengthened through the Insurance (Amendment) Act 2019, which enhanced solvency requirements, improved corporate governance standards, and strengthened the IRA’s enforcement powers.

Categories of IRA Licence

Insurer (Insurance Company) Registration

An insurer must be registered under the Insurance Act before transacting any class of insurance business in Kenya. The Act separates general insurance (property, motor, liability, and short-term risks) from long-term insurance (life assurance and related products). An insurer may not transact both general and long-term business under the same registration. Minimum paid-up share capital is KES 300 million for general insurers and KES 150 million for long-term insurers as at 2024, with additional solvency margin requirements under the IRA’s risk-based capital framework.

Insurance Broker Licence

An insurance broker arranges insurance contracts between clients and insurers for a commission or fee. Insurance brokers must hold an IRA broker’s licence, maintain professional indemnity insurance and client money segregation accounts. Minimum paid-up capital for an insurance broker is KES 3 million plus a professional indemnity policy with a minimum limit of KES 10 million per claim.

Insurance Agent Licence

An insurance agent acts on behalf of one or more specific insurers and must be licensed by the IRA, sponsored by a licensed insurer, and must have passed the Certificate of Proficiency (COP) examination administered by the College of Insurance.

Medical Insurance Provider (MIP) Licence

Entities providing managed healthcare or medical insurance services must hold an IRA Medical Insurance Provider licence. MIP licensing requirements were significantly tightened following a number of MIP insolvencies that left policyholders without cover.

Loss Assessor and Loss Adjuster Licence

Professionals assessing or adjusting insurance claims must hold IRA licences. These practitioners provide critical third-party verification in the claims settlement process and must demonstrate professional competence to the IRA’s satisfaction.

Licence Application Process

IRA licence applications are submitted with prescribed fees, audited financial statements, business plans, compliance manuals, and fit-and-proper documentation for all directors, key management, and shareholders holding 5% or more. The IRA conducts pre-licensing inspections and may require meetings with proposed management before granting registration. Processing typically takes three to six months from submission of a complete application.

Ongoing Compliance Obligations

Registered insurers must submit quarterly statutory returns to the IRA including financial position statements, premium accounts, claims accounts, and investment schedules. Annual audited financial statements must be filed within three months of year end. IRA-registered entities must also comply with investment guidelines, reinsurance cession requirements, actuarial valuation obligations, and the IRA’s Consumer Protection Guidelines on claims handling and complaints management.

IRA Enforcement

The IRA has broad enforcement powers under the Insurance Act including issuing cease-and-desist orders, imposing administrative penalties, appointing statutory managers, and initiating winding-up proceedings. Operating unregistered insurance business is a criminal offence carrying imprisonment and forfeiture of premiums received. The IRA has used these powers in several high-profile interventions involving distressed insurers.

For legal advice on IRA licensing, insurance law, or insurance-related regulatory disputes, our regulatory compliance team advises insurers, brokers, agents, and corporate clients. More information on the IRA licensing process is available at the Insurance Regulatory Authority website. Our financial services practice covers the full range of insurance and financial regulatory advisory work.