Proposed Insurance Amendment Bill Poses Potential Threat to Insurance Brokers
The proposed Insurance (Amendment) Bill will see Insurance fraudsters be jailed for a period of five years in addition to paying 10 times the amount exploited in fraud.
If passed to law, it will also remove the section which allows brokers to collect premiums from customers to the insurance companies giving customers ability to submit their premiums directly to insurance companies.
“The bill seeks to amend the Act by introducing a legal provision creating offences on insurance fraud, including penalties intended to address the problem of insurance fraud that continues to be a major challenge to the stability of the insurance industry in the country,” part of the bill reads.
The proposed insurance bill has, however received tough criticism from Association of Insurance Brokers of Kenya (AIBK) who claim that the tough law will destroy their business.
Chairman Nelson Omollo raised concern on the proposal that insurance brokers should not handle premium payment to the insurer arguing: “we all know that insurance brokers are the intermediaries, meaning that we get insurance consumers and take their business to be insured,”
The bill by National Assembly’s Finance committee chairman Joseph Limo on behalf of the National Treasury is part of legislative reforms presented by CS Henry Rotich in his budget speech on June 14.