Insurance Regulatory Authority: The Insurance Regulatory Authority (IRA) has given policy holders a three month relief in a move that is bound to rattle the insurance sector in Kenya. The move is meant to caution policy holders who may be having difficulties in settling or renewing their premiums in the wake of the coronavirus scourge.
According to the IRA, insurers in Kenya will now be required to give policy holders concessions that include deferral of payments or renewal of premiums.
“Insurers should avail policy holders a three-month grace period. The grace period may be over and above any contractual premium holidays already in place for existing policies,” IRA chief executive officer Godfrey Kiptum said in a statement.
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The concessions also include payment holidays and staggered payment formula.
A related report that appeared in the Business Daily said that some industry players said such a holiday would be difficult to apply in the general insurance segment since it would be tantamount to making insurers settle all claims even if no premiums have been paid.
“Kenya has ten broad categories of general insurance that include motor, medical, fire, aviation, engineering, liability, marine, personal accident, theft and workman’s compensation with high claims that saw an underwriting loss of Sh. 2.97 billion in the last quarter of 2019. In the life insurance segment, policy contracts have specific commencement dates and maturities and customers have to pay, failure to which they lose the policy in the first three years or get refunded a small portion of the premiums they have been paying, also known as a surrender value,” the report said.
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The new rules are expected to cause confusion in the motor industry that is mostly a cash and carry business.