• It was also put in place to minimise insurance fraud amounting to Sh367 million in 2018, according to the Insurance Regulatory Authority report 2018
Policyholders in Kenya now have to remit their premiums directly to their insurers, cutting off intermediaries.
In a public notice, the Association of Kenya Insurers (AKI) cited the recently enacted Insurance Act which came into force on Tuesday.
"In view of the foregoing, we wish to inform all insurance intermediaries and the public in general that with effect from July 23, 2019, all insurance policies will be bought on a cash and carry basis,’’ AKI said.
It advised that all premiums be paid directly to the insurance company.
AKI however said where the premium is payable by cheque, it shall be written in the name of the insurance company and can be delivered to the insurance firm by the intermediary.
The change in the Insurance Act was taken to minimise insurance fraud amounting to Sh367 million in 2018, according to the Insurance Regulatory Authority report 2018.
The earlier law allowed brokers to receive premium payments, which they held before releasing to the insurance firms.
The Bima Intermediaries Association of Kenya (BIAK) and the Association of Insurance Brokers of Kenya (AIBK) have however dismissed AKI’s notice, saying it breaks the very law it purports to follow.
"The Insurance Amendment Act, 2018 says intermediaries should not touch or smell any premium from policyholders. AKI is, however, saying we deliver cheques,’’ BIAK chairman Washington Ndegea said.
He termed the notice as premature, saying it is coming after they have lodged a court case stopping the same law.