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REGULATING SECTOR

Insurance quacks to face hefty fine in new Bill

All insurance sector players to be registered in line with provisions of the new legislation.

In Summary

• Industry currently operating with no law on who qualifies to work in sector.

• Those with past fraud or dishonesty cases will be locked out of new listing.

The Jubilee Insurance House.
TAMING INDUSTRY: The Jubilee Insurance House.

Insurance industry players are banking on a new law to rid the sector of quacks and punish the unprofessional conduct of workers. 

Currently, there is no law guiding professionalism in the industry, posing challenges with enforcing discipline.

Players among them underwriters, bank assurers and insurance agents operate on goodwill and are not answerable to any central organisation.

 

The Insurance Professionals Registration Bill, 2020 proposes a Sh50,000 fine for persons practicing without certification.

It seeks to establish the Insurance Institute of Kenya and Insurance Professionals Examination Board to regulate the sector.

The Bill sponsored by Mumias East MP Benjamin Washiali provides a mechanism for examination, registration and regulation of professionals.

A proposed Registration of Insurance Professionals Committee will issue workers practising certificates.

This will apply to employees or agents of insurance firms of sole proprietorships – like brokerage firms. 

Those who sell or market insurance products on their account or on behalf of an insurer, re-insurer or broker will be required to obtain the certificate.

It will also apply to workers attached to insurance brokers, claim selling agents, risk managers, and insurance consultants.

 

They will be required to obtain the certificates within a year of the Insurance Professionals Registration Act coming into force.

“A person shall practise as an insurance professional if he is the holder of a practicing certificate that is in force,” the Bill due for the Second Reading states. 

Those who fail to obtain the practicing certificate – renewed annually -will face the fine or six months jail term or both.

Only Kenyan citizens will be eligible for registration. Those with past fraud or dishonesty cases will not be accepted.

The register will be open for police or any public servants’ scrutiny or any person authorised by the registrar to the committee, the Bill reads.

Professional misconduct, the proposed law states, would entail a deliberate failure to follow laid-down procedures set by employer or client.

Engaging in corrupt activities or practices, gross negligence, nepotism, tribalism, racism or any acts of discrimination will be punishable.

Mis-selling of insurance products in disregard of whether the product will be helpful to the customer would qualify for misconduct.

Disclosing information acquired in the course of the business to any person without due consent will also be punished.

Soliciting sexual favours or other benefits an insurance worker is not entitled to will also be subject to a disciplinary process.

Those who will allow others to use their names to pose as insurance professionals or enter into a partnership with an unregistered firm will also be punished.

Diversion of clients’ funds and transacting with non-registered entities will also attract disciplinary proceedings.

The registration committee will also monitor compliance with professional requirements and recommend inquiry into violations.

The institute, through the committee, would also be granted powers in the new legislation to deregister non-compliant professionals.

Deregistered persons will have to surrender their certificates to the committee within 14 days or be fined Sh10,000 in default.

To get the certificate, an insurance worker will have to be certified by the proposed examination board after attaining the required qualification.

The proposed IIK will be the overall organ for insurance professionals and shall regulate conduct and set standards of services.

Fellows who have completed Fellow of Chartered Insurance Institute of London (FCII) or its Kenyan version will be members of the institute.

Associate members who have completed ACII or AIIK exams offered by Chartered Insurance Institute of London and IIK will also be part.

Also part are affiliate members who work in the industry such as lawyers, accountants and members of professional as well as corporate organs.

The institute will advise technical training institutes and the Commission for University Education on matters of examination standards. 

Edited by R.Wamochie