M-Wakili

Insurance Act - as Plain Text by MWakili

LAWS OF KENYA The Insurance acT Chapter 487 Revised Edition 2012 (2011) Published by the National Council for Law Reporting with the Authority of the Attorney General www.kenyalaw.org CAP2.

487 Insurance [Rev.

2012 CHAPTER 487 THE INSURANCE ACT ARRANGEMENT OF SECTIONS Part IPrelImInary Section 1Short title.

2Interpretation.

Part IIaPPoIntment, Powers and dutIes of the CommIssIoner of InsuranCe 3Establishment of the Authority.

3AObjects and functions of the Authority.

3BBoard of Directors.

3CPowers of the Board.

3DRemuneration of Board Members 3ECommissioner of Insurance.

3FAppointment of Secretary and other staff.

3GCommon seal of the Authority.

4The Insurance Regulatory Authority Fund.

4AFinancial Year and Annual Estimates.

4BAccounts and Audits.

4CSupersession.

5Particular duties of Commissioner.

6(Repealed).

7Power to call for information and production of books or papers.

8Examination of reinsurance treaties.

9Direction and investigations.

10Particular powers of Commissioner with regard to long term insurance business.

11Investigations of associated persons.

12Powers of investigator.

13Protection for persons complying.

14Person may be represented by an advocate.

15Notes of examination of person.

16Report of investigator.

17Directions to person investigated.

18Secrecy.

Rev.

2012] Insurance CAP.

487 3 Section Part IIIregIstratIon of Insurers 19Only authorized persons to carry on insurance business.

20Placing of risks with insurers or reinsurers not registered under Act.

21Closed fund business.

22Prohibition of registration of certain persons.

23Minimum capital requirements and holding by Kenya citizens.

24Extension of time.

25Requirement as to capital structure and voting rights.

26Provisions relating to the carrying on of both long term and general insurance business.

27One third of boards to be citizens of Kenya.

27AQualications of board members.

28Minimum assets in Kenya.

29Appropriate reinsurance arrangements.

30Application for registration.

30AOpening of a baranch.

31Registration.

32Deposits.

Part IVdePosIts 33Return of deposits if unregistered.

34Deposits to be kept by Bank on behalf of insurer.

35Substitution of deposits.

36Investment of amount deposited.

37Variation of deposits.

38Use of deposit.

39Return of deposits.

40Increase of deposits.

Part Vassets, lIabIlItIes, solVenCy margIns and InVestments 41Margin of solvency.

42Admitted assets.

43Admitted liabilities.

44Assessment of assets and liabilities.

45Establishment of statutory fund.

46Application of statutory fund.

47Assets to be in the name of insurer.

48Investment of assets.

49Unsuitable investments.

CAP4.

487 Insurance [Rev.

2012 Section 50Specied investments.

51Restriction on mortgage, etc., of assets.

Part VIaCCounts, balanCe sheets, audIt and aCtuarIal InVestIgatIons 52Separate accounts for each class.

53Apportionment between classes.

54Accounts and balance sheets.

55Accounting records.

56Audit and auditors certicate.

57Actuarial investigation.

58Actuarial valuations.

59Returns.

60Accounts and statements to be signed.

61Submission of accounts and statements.

62Further information.

63Other reports.

64Returns sufcient compliance with Companies Act.

65Rectication of returns.

66Penalty for false statements.

67Penalty for failure to comply with requirements of Part.

Part VIIInsPeCtIon and Control of Insurers 67AInspection of insurers.

67BDirections to person inspected.

67C-Power of the Commissioner to intervene in management.

67DPart to apply to unregistered and unauthorized persons.

67EPowers of inspector.

67FExpenses under Part.

67GPower to protect the assets of an insurer.

Part VIImanagement and exPenses 68Approved principal ofcer to be appointed.

68AAuthority to carry out assessment.

69Directors, managers, employees and their remuneration.

70Limitation of management expenses.

71Restrictions on loans, advances, etc., by insurer.

72Limitation on employment of managing agents.

VIIIrates, PolICy terms and ClaIms settlement 73Restrictions on rebates, brokerage, etc.

74Premium rates of life insures.

Rev.

2012] Insurance CAP.

487 5 Section 75Premium rates of general insurers.

76Law applicable to contracts of insurance and place of payment.

76AInsurance cover upon change of ownership of motor vehicle.

77Defaults of insurer, broker or agent not to invalidate policy.

78Avoidance of contracts for unlimited amounts.

79Amounts and values in policies to be expressed in Kenya currency.

80Proposal and policy documents not to be misleading.

81Incorrect statements in proposals.

82Effect of suicide or capital punishment on policy.

83Particulars as to age of proposer for life assurance.

84Notice regarding proof of age.

85Procedure where insurer declines to accept proof of age.

86Misstatement of age.

87Objections to and return of life policy.

88Paid up policies.

89Surrender of policies.

90Non-forfeiture of ordinary life policies in certain cases on non-payment of premiums.

91Non-forfeiture of industrial policies in certain cases of non-payment of premiums.

92Treatment of debts on grant of paid up policies.

93Certain policies exempted from operation of sections 88 to 92.

94Insurable interest essential for all policies.

95Property in childs advancement policy.

96Limitation of amount payable on death of child.

97Production of prescribed certicate of death.

98Savings as to insurable interest.

99Protection of insureds interests.

100Family insurance policies.

101Probate or administration may be dispensed with in certain cases.

102Death of policy holder not being life insured.

103Insurer not bound to see to application of payments.

104Power to pay into court.

105No deductions in respect of other policies.

106Lost policies.

Part IxassIgnments, mortgages and nomInatIons 107Assignments of policies.

108Effect of notice of trust.

CAP6.

487 Insurance [Rev.

2012 Section 109Assignment of policy to insurer issuing it not to merge rights etc., under policy.

110Nomination by policy holder.

111 Policies held by trustees.

Part xClaIms on small lIfe PolICIes 112Claims on small life policies.

Part xItransfers and amalgamatIons 113Application to amalgamate or transfer.

114Notice.

115Conditions for approval in relation to long term insurance business.

116Further conditions for approval.

117Approval or refusal.

118Effect of approval under s.

117.

Part xIIInsolVenCy and wIndIng uP 119Insurer dened for this Part.

120Voluntary liquidation.

121Winding up by court.

122Insolvency.

123Petitions for winding up.

124Secondary companies.

125Insurers being subsidiaries of non-insurers.

126Supplemental provisions as to winding up.

127Valuation of assets and liabilities.

128Continuation of business of insurer in liquidation.

Part xIIIthe Kenya reInsuranCe CorPoratIon 129144(Repealed).

Part xIVmandatory reInsuranCe CessIons 145Certain business to be ceded to Kenya Reinsurance Corporation.

146Power to decline business.

147Payment.

148Returns and information.

149Offences and penalty.

Rev.

2012] Insurance CAP.

487 7 Section Part xVIntermedIarIes, rIsK managers, motor assessors, InsuranCe InVestIgator, loss adjusters, InsuranCe surVeyors, medICal InsuranCe ProVIder and ClaIms settlIng agents 150Only registered brokers, agents, risk managers, motor assessors, insurance investigator, loss adjusters, surveyors and claims settling agents to carry on business.

150A.

Registration of medical insurance providers 151Application for registration.

152Disqualications.

153Registration and re-registration.

154Business by agents.

155Returns.

156Advance payment of premiums.

Part xVIthe InsuranCe adVIsory board of Kenya 157163(Repealed).

Part xVIIadVertIsements and statements 164Misleading advertisements, etc., prohibited.

165Advertisements relating to capital.

166Issue of shares or debentures by companies.

167Publication of returns.

Part xVIIIlegal ProCeedIngs and aPPeals 168Protection for ofcial acts.

169The Tribunal.

170Powers of Tribunal.

171Enforcement of orders for costs.

172Penalty for disobedience of summons to give evidence, etc.

173Appeals from Commissioners decisions.

174Cognizance of offences and restrictions on institution of proceedings.

175Criminal liability of directors, etc.

176Criminal proceedings against unincorporated bodies.

177Documents to be received in evidence.

178General penalty.

CAP8.

487 Insurance [Rev.

2012 Section Part xIxmInIsters Powers 179Policy holders compensation fund.

179AProtection from personal liability.

180Power to prescribe.

181Power of exemption.

Part xxgeneral ProVIsIons relatIng to regIstratIons and CertIfICates 182Interpretation of Part.

183Registers of authorized persons to be kept by Commissioner.

184Notication of registered persons.

185Inspection of registers.

186Evidence of matters in register.

187Alteration of registration.

188Expiry and renewal of registration.

189Issue, display and surrender of certicates.

190Name of registered person.

191Prohibition of other business.

192Further information.

193Alterations in particulars furnished.

194False or misleading statements.

195Refusal to register.

196Cancellation of registration.

196ANotication of cancellation of registration.

197Records to be maintained by registered persons.

197AImposition of premium tax.

197BImposition of insurance Training Levy.

197COffences and penalties.

197DExamination and production of documents.

197ERegulations under Part XXA and Part XXB.

197F197K(Repealed).

Part xxIsuPPlementary ProVIsIons 198Service of notice on registered persons.

199Service of notice on policy holder.

200Conversion of currency.

201Consent of Commissioner required for insurance remittances.

202Printing of documents.

203Settlement of claims.

204Appointment of public prosecutors.

Rev.

2012] Insurance CAP.

487 91 of 1985, CHAPTER 487 18 of 1986, L.N.

363/1986, THE INSURANCE ACT 12 of 1987, 13 of 1988, 9 of 1989, st 20 of 1989, Commencement: 1 January, 1987 8 of 1991, An Act of Parliament to amend and consolidate the law relating to 9 of 1992, insurance, and to regulate the business of insurance and for 4 of 1993, connected purposes 5 of 1993, 12 of 1994, 13 of 1995, 8 of 1996, 7 of 1997, 8 of 1997, 5 of 1998, 4 of 1999, 9 of 2000, 6 of 2001, 7 of 2002, 9 of 2003, 4 of 2004, 6 of 2005, 11 of 2006, 7 of 2007, 9 of 2007, 8 of 2008, 8 of 2009, 10 of 2010, 4 of 2012, 57 of 2012.

1.

This Act may be cited as the Insurance Act.

Short title.

L.N.

363/1986.

2.

(1) In this Act, unless the context otherwise requires Interpretation.

18 of 1986, Sch., actuary means 12 of 1987, s.

2, nd 9 of 1989, 2 Sch., (a) a Fellow of the Institute of Actuaries in England or of the 20 of 1989, Sch., Faculty of Actuaries in Scotland or of the Society of Actuaries 7 of 1997, s.

13, of the United States of America; or 4 of 1999, s.

72, 9 of 2003, s.

2, 11 of 2006, s.

2.

(b) such other person having actuarial knowledge as the 57 of 2012, s.

31 Commissioner may, on application of a member of the insurance industry, approve; admitted asset means any property, security, item or interest of CAP10.

487 Insurance [Rev.

2012 a person permitted or required by or under section 42 to be regarded as an admitted asset; admitted liability means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability; affairs, in relation to a person or to a person associated with another person, includes (a) the promotion, formation, membership, control, trading, dealings, business and property of the person; (b) the ownership of shares in, debentures of and interests made available by the person; (c) matters concerned with the ascertainment of the persons who are or have been nancially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to inuence materially the policy of the person; and (d) the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person; agent means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker; appointed date means the date specied in section 1 for the coming into force of this Act; assessment report means any report in respect of a claim; asset includes any property, security, item or interest of a person; auditor means a person who is qualied to be appointed an auditor of a company under section 161 of the Companies Act; Authority means the Insurance Regulatory Authority established by section 3; Cap.

488.

bank has the meaning assigned to it in the Banking Act; Board means the Board of Directors of the Authority constituted Rev.

2012] Insurance CAP.

487 11 under section 3B; bond investment business means the business of issuing bonds or endowment certicates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business; broker means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, for or on behalf of an insurer, policy holder or proposer for insurance or reinsurance; and includes a health management organisation but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya; certied means certied by a principal ofcer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certied; chairman means the person for the time being presiding over the board of directors or other governing body of the member of the insurance industry; childs advancement policy means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions- (a) provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age; (b) provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age; claims settling agent means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya; Commissioner means the ofcer appointed under section 3E; Company means the Kenya Reinsurance Corporation Limited; CAP12.

487 Insurance [Rev.

2012 contract of insurance includes a contract of re-insurance; court means the High Court; dependent, in relation to a company, means (a) that another company, either alone or with any associate, is entitled to exercise or control the exercise of one third or more of the voting power at any general meeting of the rst-mentioned company; or (b) that the rst-mentioned company is a dependant of a company which is that other companys dependant; director means a person occupying the position of a director by whatever name he may be called; document includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microlm or in any other form; nancial institution has the meaning assigned to it in the Banking Act and includes a mortgage nance company within the meaning of that Act; nancial year means the calendar year; general insurance business means insurance business of any class or classes not being long term insurance business; gross direct premium means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of (a) any premium payable in respect of mandatory cessions falling under section 145 of this Act; and (b) any other reinsurance premium ceded; gross liability means liability before deducting any part of it which is reinsured; gross premium means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of Rev.

2012] Insurance CAP.

487 13 any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer; group life insurance and group business means insurance on the lives of groups of persons formed for purposes other than that of purchasing a group life insurance policy; industrial life assurance business means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work; insurance business means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specied event, and includes (a) the effecting and carrying out by a person not carrying on a banking business, of contracts for delity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums; (b) the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts; (c) the effecting and carrying out of contracts to pay annuities on human life; and any business incidental to insurance business as so dened but does not include (i) business in relation to the benets provided by a friendly society or trade union for its members or their depen- dants; (ii) business in relation to the benets provided for its members or their dependants by an association of em- ployees; CAP14.

487 Insurance [Rev.

2012 (iii) (Deleted by 9 of 2003, s.

2(b)(i)).

(iv) business in relation to a scheme or arrangement for the provision of benets consisting of (A) the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or (B) (Deleted by 9 of 2003, s.

2(b)(ii)).

(v) business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benets provided are exclusively or primarily benets in kind; (vi) business declared by the Minister by notice in the Ga- zette not to be insurance business for the purposes of this Act; Insurance Premium Levy means the insurance premium levy payable under section 197A; insurance surveyors means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured; Insurance Training and Education Trust means the Insurance Training and Education Trust declared as such by instruments of the trustees dated 3rd May, 1988; Insurance Training Levy means the insurance training levy payable under section 197H; insurer means a person, registered under this Act, who carries on insurance business and includes a reinsurer; intermediary means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person; Rev.

2012] Insurance CAP.

487 15 investigator means the Commissioner or an investigator appointed under section 9; Kenya business and Kenya reinsurance business means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya including marine cargo insurance policies for commercial imports, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence.

Provided that, if any doubt arises as to whether on a policy of insurance the premiums are ordinarily payable in Kenya or outside Kenya, the Commissioner shall decide the question and his decision shall be nal; Kenya Government securities means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government; Kenya Reinsurance Corporation Limited has the meaning assigned to it in section 2 of the Kenya Reinsurance Corporation Act, 1997.

life assurance and life assurance business mean the business of, or in relation to the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specied sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benet under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life; long term insurance business includes insurance business of all or any of the following classes, namely, ordinary life assurance business, industrial life assurance business and bond investment business and includes, in relation to any insurer, business carried on by the insurer as incidental to any such class of business; loss adjuster and loss assessor mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer or the insured; CAP16.

487 Insurance [Rev.

2012 management expenses means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding; managing agent means a person, rm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, rm or company occupying that position, by whatever name called; medical insurance provider means an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration.

member of the insurance industry includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not; net liability means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner; net premium means the balance of the gross premium after deduction there from of any premium paid or payable by the insurer for reinsurance ceded; ordinary life assurance business means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies; ordinary life policy means a policy of life assurance other than a policy of industrial life assurance; person includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme; policy (a) in relation to ordinary life assurance business or industrial life assurance business, includes an instrument evidencing a contract to pay an annuity upon human life; Rev.

2012] Insurance CAP.

487 17 (b) in relation to bond investment business, includes a bond, certicate, receipt or other instrument evidencing the contract with the insurer; and (c) in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue; policy holder means the person who for the time being is the legal holder of the policy for securing the contract with the insurer; premium includes the consideration for the granting of an annuity; principal ofcer means an ofcer appointed under section 68; registration means registration under this Act and includes a renewal of registration; regulations and rules mean regulations and rules made under this Act; reinsurer means a person who carries on reinsurance business and includes a retrocessionaire; reinsurance business means the business of undertaking liability to pay money to insurers or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession; related, in relation to an insurer, means (a) a dependant of that insurer; (b) a company of which the insurer is a dependant; or (c) a dependant of a company of which the insurer is a dependant; retrocession means the reinsurance of reinsurance business accepted by a reinsurer; retrocessionaire means a person reinsuring a reinsurer; risk manager means a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen CAP18.

487 Insurance [Rev.

2012 events, and of minimizing the cost of such protection by physical or nancial measures through insurance or any other means.

signifacant owner means a person who directly or indirectly holds more than ten percent of controlling or benecila interest in a person licenced under this Act.

statutory fund means the fund established under section 45; subsidiary has the meaning assigned to it in section 154 of the Companies Act; Tribunal means the tribunal established under section 169; vesting age means (a) the age of eighteen years; or (b) an age of not less than ten years on or after the attainment of which by the child it is specied in the policy that sums payable in respect of the policy by the insurer who issued it shall be paid to the child or his executors, administrators or assigns.

(2) An insurer shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business 11 of 2006, s.

3 remains unsatised and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specically provided in any other section thereof, in relation to that class of business.

Part IIthe InsuranCe regulatory authorIty Establishment of the 3.

(1) There is established an Authority to be known as the Authority.

Insurance Regulatory Authority.

11 of 2006, s.

4.

(2) The Authority shall be a body corporate with perpetual succession and a common seal and shall in its corporate name be capable of (a) suing and being sued; (b) taking, purchasing or otherwise acquiring, holding, charging or disposing of movable and immovable property; (c) borrowing or lending money, and (d) doing or performing all other things or acts for the Rev.

2012] Insurance CAP.

487 19 furtherance of its functions under the provisions of this Act, which may be lawfully done or performed by a body corporate.

3A.

The objects and functions of the Authority shall be to Objects and functions of the Authority.

(a) ensure the effective administration, supervision, regulation 11 of 2006, s.

4, and control of insurance and reinsurance business in 10 of 2010, s.

51, Kenya; 57 of 2012, s.

32.

(b) formulate and enforce standards for the conduct of insurance and reinsurance business in Kenya; (c) license all persons involved in or connected with insurance business, including insurance and reinsurance companies, insurance and reinsurance intermediaries, loss adjusters and assessors, risk surveyors and valuers; (d) protect the interests of insurance policy holders and insurance beneciaries in any insurance contract; (e) promote the development of the insurance sector; (f) advise the Government on the national policy to be followed in order to ensure adequate insurance protection and security for national properties; and (g) issue supervisory guidelines and prudential standards from time to time, for the better administration of the insurance business of persons licensed under this Act; (h) conduct inquiries and share information with other regulatory authorities and to carry out any other related activities in furtherance of its supervisory role; (i) undertake such other functions as may be conferred on it by this Act or by any other written law.

3B.

(1) The management of the Authority shall vest in the Board Board of Directors.

of Directors of the Authority which shall comprise 11 of 2006, s.

4.

(a) a chairman to be appointed by the President on the recommendation of the Minister; (b) the Commissioner of Insurance appointed under section 3E; CAP20.

487 Insurance [Rev.

2012 (c) the Permanent Secretary in the Ministry for the time being responsible for matters relating to nance or his representative; (d) the Chief Executive Ofcer of the Retirement Benets Authority; (e) the Chief Executive Ofcer of the Capital Markets Authority; (f) the Governor of the Central Bank of Kenya or his representative, and (g) a nominee of the Insurance Institute of Kenya; (h) four other members, not being public ofcers, appointed by the Minister.

(2) The chairman and every member appointed under paragraphs (a), (g) or (h) of subsection (1) shall be appointed from amongst persons who have knowledge or experience in matters relating to insurance, nance, banking or actuarial science.

(3) A person shall not be eligible for appointment under paragraphs (a), (g) or (h) of subsection (1) if such person (a) has at any time been convicted of any offence involving fraud, theft, dishonesty, breach of trust or moral turpitude; (b) was previously involved in the management or administration of a nancial institution which was deregistered, wound up or placed under statutory management or the administration thereof; (c) is a director, ofcer, employee or shareholder of any insurer, broker, insurance agent or any other member of the insurance industry; or (d) is disqualied under any other written law form holding public ofce or being a director of any institution.

Powers of the Board.

3C.

(1) The Board shall have all the powers necessary for the 11 of 2006, s.

4.

performance of its functions under this Act, and, without prejudice to the generality of the foregoing, shall have power to (a) control, supervise and administer the assets of the Authority in such manner and for such purposes as best promote the purpose for which the Authority is established; Rev.

2012] Insurance CAP.

487 21 (b) determine the provisions to be made for capital and recurrent expenditure and for the reserves of the Authority; (c) receive any grants, gifts, donations or endowments on behalf of the Authority and make legitimate disbursements therefrom; (d) enter into association with such other bodies or organizations, within or outside Kenya, as it may consider desirable or appropriate and in furtherance of the purpose for which the Authority is established; (e) open a banking account or banking accounts for the funds of the Authority; and (f) invest the funds of the Authority not currently required for its purposes in the manner provided in this Act.

(2) The conduct and regulation of the business and affairs of the Board shall be as provided in the Schedule, but subject thereto, the Board may regulate its own procedure.

(3) The Board may, by resolution either generally or in any particular case, delegate to any committee of the Board or to any member, ofcer, employee or agent of the Authority, the exercise of any of the powers, or the performance of any of the functions or duties of the Authority under this Act, or under any other written law.

3D.

The Authority, in consultation with the Minister, shall pay Remuneration of the members of the Board such remuneration, fees or allowances for Board members.

expenses as it may determine.

11 of 2006, s.

4.

3E.

(1) There shall be a Commissioner of Insurance who shall be Commissioner of the chief executive ofcer of the Authority and who shall be appointed Insurance.

by the Board, in consultation with the Minister, on such terms and 11 of 2006, s.

4.

conditions of service as may be determined by the Board in the instrument of appointment, or otherwise in writing from time to time.

(2) The Commissioner shall be an ex ofcio member of the Board but shall have no right to vote at any meeting of the Board.

(3) The Commissioner shall, subject to the directions of the Board, be responsible for the day-to-day management of the affairs of the Authority.

(4) A person shall be qualied to be appointed under this section CAP22.

487 Insurance [Rev.

2012 if such person (a) has considerable knowledge, competence and at least ten years experience in a managerial capacity in insurance, accounting, nance, actuarial science or banking; and (b) is not engaged in the insurance business as a director, employee, ofcer or shareholder of any insurer, broker, insurance agent, or in any other sector of the insurance industry, and if appointed shall be disqualied if he, his spouse or dependent child becomes such director, employee, ofcer or shareholder.

Appointment of 3F.

(1) The Board shall appoint a secretary to the Board on such Secretary and other terms and conditions of service as it may determine.

staff.

11 of 2006, s.

4.

(2) The Board may appoint such ofcers or servants as are necessary for the proper discharge of the functions of the Authority under this Act or any other written law, upon such terms and conditions of service as it may determine.

Common seal of the 3G.

(1) The common seal of the Authority shall be kept in such Authority.

custody as the Board may direct, and shall not be used except on the 11 of 2006, s.

4.

order of the Board.

(2) The common seal of the Authority, when afxed to a document and duly authenticated, shall be judicially and ofcially noticed, and, unless and until the contrary is proved, any necessary order or authorisation by the Board under this section shall be presumed to have been duly given.

The Insurance 4.

(1) The Authority shall establish a general fund to be known as Regulatory Authority the Insurance Regulatory Authority Fund, hereafter referred to as the Fund.

Fund, which shall vest in the Authority.

11 of 2006, s.

5.

(2) There shall be paid into the Fund (a) all proceeds of the insurance premium levy imposed by section 197A; (b) such moneys as may accrue to or vest in the Authority in the course of the exercise of its powers or the performance of its functions under this Act; (c) such sums as may be payable to the Authority pursuant to this Act or any other written law, or pursuant to any gift or trust; Rev.

2012] Insurance CAP.

487 23 (d) such sums as may be granted to the Authority by the Minister pursuant to subsection (3); and (e) all moneys from any other source provided for, donated to or borrowed by the Authority.

(3) There shall be made to the Authority, out of moneys provided by Parliament for that purpose, grants towards the expenditure incurred by the Board in the exercise of its powers and the performance of its functions under this Act.

(4) The Authority may invest any of its funds in securities which trustees are by law allowed to invest trust funds, or in any other securities which the Treasury may, from time to time approve.

(5) There shall be paid out of the fund all such sums of money required to defray the expenditure incurred by the Authority in the exercise of powers and performance of its functions and duties.

4A.

(1) The nancial year of the Authority shall be the period of Financial Year and twelve months ending on the thirtieth of June in each year.

Annual Estimates.

11 of 2006, s.

5.

(2) At least four months before the commencement of each nancial year, the Board shall prepare estimates of revenue and expenditure of the Authority for that year.

(3) The annual estimates shall make provision for all the estimated expenditure of the Authority for the nancial year and in particular, the estimates shall provide for (a) the payment of salaries, allowances and other charges in respect of the staff of the Authority; (b) the payment of pensions, gratuities and other charges in respect of the retirement benets which are payable out of the funds of the Authority; (c) the proper maintenance of the buildings and grounds of the Authority; (d) the maintenance, repair and replacement of the equipment and other property of the Authority; (e) the creation of such reserve funds to meet future or contingent liabilities in respect of retirement benets, insurance or replacement of buildings or equipments, or in respect of such CAP24.

487 Insurance [Rev.

2012 other matter as the Board may deem appropriate.

(4) The annual estimates shall be prepared at least three months before the commencement of the nancial year to which they relate and shall be submitted to the Minister for approval and after such approval, the Authority shall not increase the annual estimates without the consent of the Minister.

(5) No expenditure shall be incurred for the purposes of the Board except in accordance with the annual estimates approved under this section or in pursuance of an authorization by the Minister.

Accounts and audit.

4B.

(1) The Authority shall cause to be kept all proper books 11 of 2006, s.

5.

and records of account of the income, expenditure and assets of the Authority.

(2) Within a period of four months after the end of each nancial year, the Board shall submit to the Controller and Auditor-General or an auditor appointed by the Board under the authority of the Controller and Auditor General, the accounts of the Authority together with (a) a statement of income and expenditure during that year; and (b) a statement of the assets and liabilities of the Authority on the last day of that year.

No.

12 of 2003.

(3) The accounts of the Authority shall be audited and reported upon in accordance with the Public Audit Act, 2003.

Supersession.

4C.

Where there is a conict between the provisions of this Act 11 of 2006, s.

5.

and the provisions of any written law with regard to the powers or functions of the Board or the Authority under this Act, the provisions of this Act shall prevail.

Particular duties of 5.

(1) Subject to this Act, the duties of the Commissioner shall Commissioner.

12 of 1994, s.

2, include 11 of 2006, s.

6.

(a) (Deleted by 11 of 2006, s.

6.

(a)(i)).

(b) directing insurers and reinsurers on the standardization of contracts of compulsory insurance; (c) directing an insurer or a reinsurer, where he is satised that the wording of a particular contract of insurance issued by the insurer or reinsurer is obscure or contains ambiguous terms or terms and conditions which are unfair or oppressive to Rev.

2012] Insurance CAP.

487 25 the policy-holders, to clarify, simplify, amend or delete the wording, terms or conditions, as the case may be, in respect of future contracts; (d) the approval of tariffs and rates of insurance in respect of any class or classes of insurance; (e) such other duties as the Board may assign to him.

(1A) The Board may, with the approval of the Minister make regulations for the purpose of giving effect to the provisions of this Part.

(2) The Board shall, as soon as reasonably practicable after each year ending on 31st December, furnish to the Minister a report on the working of this Act during that year together with summaries of returns and documents deposited with him under Part VI during that year; and the Minister shall lay the report before the National Assembly as soon as reasonably practicable thereafter.

6.

(Repealed by 11 of 2006, s.

7).

7.

(1) The Commissioner may, by notice in writing, require a Power to call for member of the insurance industry to supply him with information information and relating to his insurance business, and that person shall comply with production of books the requirement within such period after receipt of the notice as may or papers.

be specied therein failing which he shall be deemed to have failed to comply with the provisions of this Act.

(2) Information supplied under this section shall be certied by a principal ofcer of the member of the insurance industry in question and, if the notice so requires, also by an auditor.

(3) The Commissioner may by notice in writing (a) require a member of the insurance industry to produce, at such time and place as he may specify, such books or documents as he may specify; or (b) authorize any person, on producing (if required to do so) evidence of his authority, to require a member of the insurance industry to produce to him forthwith any books or documents which that person may specify.

(4) Where by virtue of subsection (3) the Commissioner or a person authorized by him has power to require the production of books CAP26.

487 Insurance [Rev.

2012 documents from a member of the insurance industry, the Commissioner or that person shall have the same power to require production of those books or documents from any person who appears to him to be in possession of them.

(5) Where any person from whom production of a document is required claims a lien on the document produced by him, the production shall be without prejudice to the lien.

(6) The power conferred by or by virtue of subsections(3) and (4) to require a member of the insurance industry or other person to produce books or documents shall include power- (a) if the books or documents are produced (i) to take copies of them or extracts of or from them; and (ii) to require that person, or any other person who is a pres- ent or past director of, auditor of, or is or was at any time employed by, the member of the insurance industry in question, to provide an explanation of any of them; (b) if the books or documents are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.

(7) A person who in purported compliance with are requirement imposed under this section furnishes information which he knows to be false in a material particular, or who recklessly furnishes information which is false in a material particular, or who, having been required to produce a book or document for examination, alters, mutilates, damages, destroy, conceals or removes it without the written consent of the Commissioner, shall be guilty of an offence and liable to a ne not exceeding ten thousand shillings or imprisonment for a term not exceeding twelve months or to both.

Examination of reinsurance treaties.

8.

(1) The Commissioner may (a) call upon an insurer to submit for his examination at his ofce all reinsurance treaties and other reinsurance contracts entered into by the insurer; (b) by notice in writing, require an insurer to supply him with copies of any of the documents referred to in paragraph (a) certied by a principal ofcer of the insurer.

(2) If on the scrutiny of a document referred to in subsection (1) Rev.

2012] Insurance CAP.

487 27 or otherwise the Commissioner considers that any reinsurance treaty, contract or arrangement or any terms or conditions therein are not favourable to the insurer or are not in the interests of the economy or the insurance industry or in the public interest, he may in writing direct the insurer either (a) to make, at the time when the renewal of that treaty or contract next becomes due, such modications in its terms and conditions as he may specify; or (b) not to renew that treaty, contract or arrangement.

(3) A person who fails to comply with, or contravenes any requirement imposed under, this section shall be guilty of an offence and liable to a ne not exceeding ten thousand shillings or imprisonment for a term not exceeding twelve months or to both, and if the offence is a continuing one, to a further ne not exceeding two hundred shillings for everyday during which the offence continues.

Directions and 9.

(1) Where the Commissioner investigations.

11 of 2006, s.

8, (a) has reason to believe that 57 of 2012, s.

32.

(i) an offence under this Act or default in complying with any of the provisions of this Act or any subsidiary legislation made thereunder has been or is likely to be committed by a member of the insurance industry; or (ii) the affairs of any member of the insurance industry are being conducted in a manner which is detrimental or prejudicial to the interests of that member, any policy holder, the economy or the insurance industry; or (iii) an insurer may be unable or is likely to become unable to meet his obligations or, in the case of long-term in- surance business to full the reasonable expectation of policy holders or potential policy holders; or (b) receives a requisition signed by not less than ten per cent of policy holders holding policies of life assurance in force respectively for not less than three years with an insurer and which on maturity will be for a total value of not less than one million shillings, that an investigation be held into the affairs of that insurer; or (bb) receives a request to conduct an inquiry or investigation by regulatory authority on a person lisenced under this Act; or CAP28.

487 Insurance [Rev.

2012 (c) receives a requisition signed by not less than one-tenth of the shareholders holding not less than one-tenth of the share capital of an insurer, that an investigation be held into his affairs, the Commissioner may exercise any one or more of the powers set out in subsection (2).

(2) The powers referred to in subsection (1) are that the Commissioner may (a) by notice in writing served on the person concerned, direct him to furnish to the Commissioner within such period after service of the notice, being not less than seven days, as he species in the notice, information in writing about such matters in relation to the affairs of the person as he so species; (b) by notice in writing served on the person concerned direct him not to dispose of or otherwise deal with or remove from Kenya an asset in Kenya specied in the notice during such period after service of the notice, being not more than six months, as he species in the notice; (c) after giving the member of the insurance industry a reasonable opportunity of being heard, and with the written approval of the Board, give such directions in writing as he considers necessary, to be effective from a specied date; (d) after giving the member of the insurance industry a reasonable opportunity of being heard, and with the written approval of the Board, prohibit that member of the insurance industry from entering into any particular transaction or class of transactions; (e) after giving the member of the insurance industry a reasonable opportunity of showing cause why, on such grounds as he so species, an investigation should not be conducted in respect of that member, with the approval in writing of the Board, investigate, or, by instrument in writing appoint any person, other than a person in the employ of that member, to investigate the affairs of that member.

(3) With regard to a requisition made under paragraph (b) or (c) of subsection (1) the Commissioner may, before ordering an investigation, require the persons making the requisition to furnish security in such Rev.

2012] Insurance CAP.

487 29 amount as he considers sufcient to meet the costs to be incurred by the member of the insurance industry and by the Commissioner in respect of the investigation.

(4) A person who fails to comply with a direction issued or who contravenes a prohibition imposed under subsection (2) shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings; and if the offence is a continuing one, to a further ne not exceeding one hundred shillings for every day during which the offence continues.

(5) The Commissioner or other person appointed by him to investigate the affairs or a member of the insurance industry may, wherever necessary, employ an auditor, actuary or other person to assist him in the investigation.

(6) All expenses of, and incidental to, an investigation under this section shall be defrayed by the member of the insurance industry and if they are not paid by him within a period of one month after the Commissioner makes a demand to him, shall constitute a civil debt recoverable summarily by the Commissioner.

10.

(1) Where an insurer carrying on long term insurance business Particular powers of has not issued a new policy of that category of insurance for a period Commissioner with of twelve months from the appointed date, or from the date of issue regard to long term of the last policy, whichever is later, the Commissioner may, with the insurance business.

approval of the Board direct the insurer to frame proposals for transfer 12 of 1987, s.

3, or amalgamation of its business to or with another insurer.

12 of 1994, s.

3, 8 of 1996, s.

48, 11 of 2006, s.

9.

(2) Where an insurer fails to comply with a direction under subsection (1), or if the proposals framed by the insurer are in the opinion of the Commissioner unsatisfactory, the Commissioner may himself frame a scheme for the transfer of the business to another insurer specied by the rst mentioned insurer and approved by the Commissioner.

(3) Where an insurer fails to implement a scheme framed by the Commissioner under subsection (2) and the Commissioner considers that the continuance in business of that insurer is likely to lead to insolvency, or is otherwise contrary to the interests of policy holders he may with the prior approval of the Minister (a) order an investigation of that insurer; or (b) apply to the court for winding up the business of the insurer in terms of section 123 (1) (b).

(4) An insurer who, upon an investigation ordered under CAP30.

487 Insurance [Rev.

2012 subsection (3)(a) is found to have disposed of any assets from a closed fund contrary to the provisions of section 21, or to have misappropriated such assets, commits an offence and is liable on conviction, to a ne not exceeding one hundred thousand shillings or, where the insurer is a natural person to imprisonment for a term not exceeding ve years, or to both.

(5) An insurer convicted under subsection (4) shall forthwith be liable to refund the assets misappropriated from the closed fund.

(6) An insurer who fails to refund any assets under subsection (5) commits an offence and is liable on conviction to a ne not exceeding one hundred thousand shillings, or, if the insurer is a natural person, to imprisonment for a term not exceeding ve years, or to both.

(7) If an offence under subsection (6) is a continuing one, the insurer shall be liable to a further ne of ve thousand shillings for every day during which the offence continues.

(8) In this section the expression closed fund means a closed fund within the meaning of section 21.

Investigations of 11.

(1) Where an investigator believes on reasonable grounds associated person.

that it is necessary for the purposes of an investigation under section 9 11 of 2006, s.

10.

to investigate the whole or some part of the affairs of another person that is, or has at some relevant time been, associated with the person in respect of which he is appointed, he may, with the consent in writing of the Board, investigate the whole or that part of the affairs of that other person.

(2) Before commencing the investigation, the investigator shall, if requested, serve on the associated person a copy of he consent in writing of the Board.

(3) For the purposes of this section, a person is associated with another person if the two persons are related to each other and- (a) the rst-mentioned person is a member of the insurance industry; and (b) either of those persons is, or has directors who are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the other person or of its directors.

Powers of 12.

(1) An investigator may, by notice in writing, require any investigator.

person who is or has at any time been a director, managing director, Rev.

2012] Insurance CAP.

487 31 secretary, principal ofcer, manager, ofcer or employee, agent, accountant, broker, auditor or actuary of the person being investigated to (a) give to the investigator all reasonable assistance in connection with the investigation; or (b) appear before the investigator for examination concerning matters relevant to the investigation; or (c) produce any books or documents that relate to the affairs of the person being investigated.

(2) Where books or documents are produced to an investigator under this section, the investigator may take possession of them for such period as he thinks necessary for the purposes of the investigation and may make copies of and take extracts from them, but shall permit a person who would be entitled to inspect any of them, if they were not in the possession of the investigator, to inspect at all reasonable times such of those books as that person would be so entitled to inspect.

(3) No person shall (a) refuse or fail to comply with a requirement of an investigator that is applicable to him, to the extent to which he is able to comply with it; or (b) in purported compliance with such a requirement, furnish information or make a statement that he knows to be false or misleading in a material particular; or (c) when appearing before an investigator for examination in pursuance of such a requirement, make a statement that he knows to be false or misleading in a material particular; or (d) obstruct or hinder an investigator in the exercise of his powers under this Act.

(4) A person who acts in contravention of subsection (3) shall be guilty of an offence and liable to a ne not exceeding two thousand shillings.

(5) A person being examined by an investigator shall not be excused from answering a question put to him by an investigator on the ground that the answer might tend to incriminate him but, where the person informs the investigator before answering the questions that the answer might tend to incriminate him, neither the question CAP32.

487 Insurance [Rev.

2012 nor the answer shall be admissible in evidence against him in criminal proceedings other than proceedings in relation to an offence under subsection (4).

Protection for 13.

A person who complies with a requirement of an investigator persons complying.

under this Act shall not incur any liability to any other person by reason only of that compliance.

Person may be 14.

An advocate acting for a person being examined by an represented by an advocate.

investigator (a) may attend the examination; and (b) may (i) address the investigator; and (ii) examine the person, in relation to matters in respect of which the investigator has questioned the person.

Notes of examination 15.

(1) An investigator may cause notes of an examination of a of person.

person to be recorded and read to or by that person and may require that person to sign the notes and, subject to section 12(5), notes signed by that person may be used in evidence in proceedings under this Act against that person.

(2) A copy of the notes signed by a person shall be furnished without charge to that person request made by him in writing to the investigator.

(3) Where notes are recorded under this section, the notes shall be furnished to the Commissioner with the report of the investigation to which they relate.

Report of 16.

(1) An investigator may make one or more reports in writing investigator.

to the Commissioner during the investigation of the whole or a part of the affairs of a person and shall, if so directed in writing by the Commissioner, make such reports as are specied in the direction.

(2) A report made on the completion of the investigation shall include (a) a statement of the opinion of the investigator in relation to the grounds for investigation and the facts on which that opinion is based and recommendations thereon; Rev.

2012] Insurance CAP.

487 33 (b) the recommendations of the investigator with respect to (i) the question whether the person investigated should con- tinue to be permitted to carry on business; (ii) any directions that should be given under section 17 to the person investigated; (iii) the question whether the affairs of the investigated person should be reorganized; and (iv) such other matters, affecting the person investigated or otherwise in the public interest in elation to the business carried on by the person investigated, as he thinks t.

(3) An investigator shall not include in a report a recommendation relating to the institution of criminal proceedings or a statement to the effect that, in his opinion, a specied person has committed a criminal offence.

(4) The Commissioner shall give a copy of a report made to him under this section to the person investigated.

(5) The Minister may, if he considers it is in the public interest to do so and after taking into consideration any advice he has received from the Attorney General, cause the whole or some part of the report to be published.

17.

(1) The Commissioner may, by notice in writing, require a Directions to person person investigated to comply by such date or within such period as may investigated.

be specied therein, with such directions as he considers necessary in connection with any matter arising out of a report made under section 16.

(2) Without prejudice to the generality of subsection (1), the Commissioner may, where the person investigated is an insurer, with the approval of the Minister, issue any one or more of the following directions (a) that the insurer shall not issue new policies or undertake liability under new contracts of insurance; (b) that the insurer shall not renew existing policies; (c) that the insurer shall not issue policies in respect of a class of insurance business specied in the direction or undertake CAP34.

487 Insurance [Rev.

2012 liability under contracts of insurance included in a class of contracts of insurance so specied; (d) that the insurer shall not renew existing policies in respect of a class of insurance business specied in the direction.

(3) Without prejudice to the generality of subsection (1), the Commissioner may, where the person investigated is an insurer; issue any one or more of the following directions (a) that the insurer shall not dispose of or otherwise deal with an asset of the insurer or an asset of the insurer included in a class of assets specied in the direction; (b) that the insurer shall dispose of an asset of the insurer included in a class of assets specied in the direction, in such manner and within such period after the giving of the direction, not being less than twenty-one days, as the Commissioner so species; (c) that the insurer shall, within such period after the giving of the direction, not being less than twenty-one days, as the Commissioner species in the direction, make in his accounts such provision or further provision as the Commissioner so species in respect of unearned premiums or claims or in respect of both unearned premiums and claims; (d) that the insurer shall, within such period after the giving of the direction, not being less than twenty-one days, as the Commissioner species in the direction, adjust one or more of his reserves and make appropriate investment in connection with such reserve or reserves, as the case may be; (e) that the insurer shall make such arrangements with respect to reinsurance or retrocession as he so species; (f) that the insurer shall increase, so far as he is able to do so, his paid up capital whether by calling up such uncalled capital as is available to be called up or otherwise: (g) that the insurer shall not, except with the consent of the Commissioner (i) enter into an arrangement or agreement for the sale or disposal of his business by amalgamation or otherwise or for the carrying on of his business in partnership with another body corporate; or Rev.

2012] Insurance CAP.

487 35 (ii) effect a reconstruction of the insurer; (h) that the insurer shall, within such period after the giving of the directions, not being less than six months, as the Commissioner species in the direction, effect a reconstruction of the insurer.

(4) Where a body corporate in respect of whom a direction has been given under subsection (1), (2) or (3) is commenced to be wound up, the direction shall cease to have effect unless the court directs otherwise.

(5) If, as a result of a report by an investigator, the Commissioner considers that it is necessary in the interests of policy holders that the person investigated be wound up, or if the person investigated fails to comply with any direction issued under this section, the Commissioner may, after giving the person investigated a reasonable opportunity of making representations, apply to the court for an order for the winding up of the person investigated, in which case the provisions of the Cap.

486.

Companies Act relating to the winding up of a company (as varied by Part XII of this Act) shall apply.

(6) Where, after reading a report made under section 16, the Commissioner considers that a requisition under paragraphs (b) or (c) of subsection (1) of section 9 has been made without reasonable cause, he may order that the whole or any part of the amount furnished as security under subsection(3) of that section shall be forfeited and paid to the person investigated and the Commissioner in order to defray the respective costs incurred by them.

18.

(1) This section applies to every person who is or has been Secrecy.

the Commissioner of Insurance or a member of the staff assisting the 12 of 1994, s.

4, Commissioner or an investigator or any other person appointed by or 57 of 2012, s.

34.

assisting the Commissioner.

(2) Subject to this section, a person to whom this section applies shall not, either directly or indirectly, except in the performance of a duty under or in connection with this Act, make a record of or divulge or communicate to any person, any information concerning the affairs of any other person acquired by him by reason of his ofce or employment under or for purposes of this Act.

(3) Nothing in this section shall prevent the communication of information or the production of a document, by the Commissioner or by a member of the staff or other person assisting the Commissioner or by an investigator authorized by the Commissioner in that behalf, to a CAP36.

487 Insurance [Rev.

2012 person to whom, in the opinion of the Minister, it is in the public interest that the information be communicated or the document produced.

(4) The Commissioner or a member of the staff or other person assisting the Commissioner and authorized by him in that behalf may furnish to the Director of Statistics or the to a regulatory authority information obtained from a member of the insurance industry or policy holder; Provided that any information furnished to the Director of Statistics or to the regulatory authority under this subsection shall be treated as condential and used solely for the purposes of this Act (5) A person who contravenes the provisions of this section shall be guilty of an offence and liable to a ne not exceeding ten thousand shillings or imprisonment for a term not exceeding twelve months or to both.

Part IIIregIstratIon of Insurers Only authorized 19.

(1) Except as otherwise provided in or under this Act, only persons to carry on a person registered under this Act shall, on or after the appointed date, insurance business.

carry on insurance business (a) in Kenya, whether in respect of Kenya insurance or reinsurance business or otherwise; or (b) outside Kenya in respect of Kenya business, except Kenya business which is solely reinsurance business: Provided that, notwithstanding this subsection, an insurer carrying on insurance business immediately before the appointed date may continue to carry on insurance business without being registered under this Act (i) for a period of three months beginning with that date; and (ii) if before the expiration of that period he applies for regis- tration under this Act, until he is registered or registration is refused or his application is withdrawn.

(2) A person resident in Kenya or an association of persons or body corporate established in Kenya who or which carries on insurance business in any part of the world other than Kenya shall for the purposes of this Act be deemed to be an insurer carrying on that business within Kenya.

Rev.

2012] Insurance CAP.

487 37 (3) A person who carries on insurance business in contravention of subsection (1) shall be guilty of an offence and liable to a ne not exceeding fty thousand shillings and, if the offence is a continuing one, to a further ne of one thousand shillings for every day during which the offence continues.

(4) Where a person guilty of an offence under subsection (3) is a natural person, that person shall be liable, in addition to, or in the alternative to, a ne, to imprisonment for a term not exceeding two years.

(5) Where a person guilty of an offence under subsection (3) is a body corporate, then notwithstanding the imposition of any penalty, the commission of that offence shall constitute grounds whereby the Commissioner may apply to the court for the winding up of that body corporate.

20.

(1) No insurer, broker, agent or other person shall directly or Placing of risks indirectly place any Kenya business other than reinsurance business with insurers and with an insurer not registered under this Act without the prior approval, reinsurers not whether individually or generally, in writing of the Commissioner.

registered under this Act.

(2) No insurer, broker, agent or other person shall directly or 7 of 1997, s.14.

indirectly place any reinsurance of Kenya business with an insurer not registered under this Act except under the following conditions- (a) in the case of treaty reinsurance, with the approval of the Commissioner to the treaty, and subject to such restrictions as he may specify; (b) in the case of facultative reinsurance, subject to the prior approval in writing of the Commissioner to the placing of each particular risk with insurers or reinsurers not registered under this Act.

(3) Paragraph (a) of subsection (2) shall be deemed to have been complied with in respect of any reinsurance treaty or contract in force on the appointed date until the date of the next renewal of registration or the date of the renewal of the treaty or contract, whichever is earlier, if the treaty or contract is certied by the Kenya Reinsurance Corporation Limited as having been approved by that company.

(4) A person who contravenes the provisions of subsection (1) or (2) shall be guilty of an offence and liable to a ne not exceeding ten thousand shillings or to imprisonment not exceeding one year or to both.

CAP38.

487 Insurance [Rev.

2012 (5) A policy or contract of insurance or reinsurance effected or renewed in contravention of subsection (1) of section 19, or subsection (1) of this section, shall not be invalid, void or unenforceable solely on the grounds of that contravention.

Closed fund business.

21.

(1) Nothing in section 19 shall prohibit, without registration 8 of 1996, s.

49.

under this Part, the continuance, subject to sections 10 and 123 (1) (b), of insurance business in Kenya by an insurer, in so far as it is necessary to maintain, without renewal, any policy or contract of insurance, issued before the appointed date (in this section called closed fund business); but so long as any liability upon such a policy or contract of insurance remains unpaid or undischarged, all the provisions of this Act shall apply to that insurer, unless the Minister, in writing, specically grants exemption therefrom or from any provision thereof.

(2) Where an insurer was on the appointed date carrying on only closed fund business and does not intend to apply for registration under this Part, he shall, within three months after the appointed date, notify the Commissioner in writing that he does not so intend.

(3) The Commissioner may, by notice in writing served on the insurer, require him to furnish within such period, not being less than three months, as he species, the particulars of the insurers business in Kenya requested in the notice.

(4) A person who fails to comply with the provisions of subsection (2) or (3) shall be guilty of an offence and liable to a ne not exceeding ten thousand shillings and, if the offence is a continuing one, to a further ne of ve hundred shillings for every day during which the offence continues.

(5) No person shall dispose of any assets from a closed fund except with the prior written approval of the Commissioner.

(6) A person who contravenes the provisions of subsection (5) commits an offence.

Prohibition of 22.

Subject to section 23, no person shall be registered as an registration of certain insurer under this Act unless that person is a body corporate incorporated persons.

under the Companies Act and at least one third of the controlling 18 of 1986, Sch., interest, whether in terms of shares, paid up share capital or voting 11 of 2006, s.

11.

rights, as the case may be, are wholly owned by citizens of Kenya or Cap.

486.

by partnership whose partners are all citizens of Kenya or by a body corporate whose shares are owned by citizens of Kenya or is wholly owned by the Government.

Rev.

2012] Insurance CAP.

487 39 23.

(1) No person shall be registered as an insurer or if registered Minimum capital shall have his registration renewed unless he meets the minimum capital requirements and holding by Kenya requirements specied in the Schedule.

citizens.

(2) The Minister may, by order published in the Gazette, amend 12 of 1994, s.5, the Schedule.

8 of 2009, s.

46, 10 of 2010, s.

52.

(3) Every order made under this section or under section 28 shall be laid before the National Assembly without unreasonable delay and unless a resolution approving the order is passed by the assembly within twenty days on which it next sits after the order is so laid, it shall thenceforth be void without prejudice to anything previously done under or to the issuing of a new order.

(4) Out of the amount of the paid-up capital under subsection (1), not less than one third shall be owned by Kenya citizens or by a partnership whose partners are all citizens of Kenya or wholly owned by citizens of Kenya or is wholly owned by Government.

(4A) No person shall - (a) control, or be benecially entitled, directly or indirectly, to more than twenty-ve per cent of the paid-up share capital or voting rights of an insurer; or (b) be entitled to appoint more than twenty-ve per cent of the board of directors of an insurer; or (c) be entitled to receive more than twenty-ve per cent of the aggregate dividends of an insurer in any given nancial year: Provided that this subsection shall not apply to (i) a corporate entity licensed by an insurance, banking, pen- sions or securities regulator in Kenya; or (ii) a foreign corporate entity licensed by an insurance, banking, pensions or securities regulator in its country of origin; or (iii) the Government of Kenya; (iv) a state corporation within the meaning of the State Corporations Act.

Cap.

446.

(v) a company listed in a stock exchange.

CAP40.

487 Insurance [Rev.

2012 (4B) No person shall be appointed as an executive director, managing director, principal ofcer or other senior management ofcial of an insurer if such person- (a) controls, or is benecially entitled, directly or indirectly, to more than twenty per cent of the paid-up share capital or voting rights of the insurer; or (b) is entitled to appoint more than twenty per cent of the Board of Directors of the insurer; or (c) is entitled to receive more than twenty per cent of the aggregate dividends of the insurer in any given nancial year.

(4C) A person who, at the commencement of subsections (4A) and (4B), holds any right, interest or ofce in an insurer contrary to the provisions of those subsections, shall comply with the requirements thereof by the 31st December, 2011.

(4D) For the purposes of subsection (4A), indirect control or benecial entitlement to the paid up share capital or voting rights of an insurer, means control or entitlement (a) in the case of a company or body corporate, through (i) a holding company or its subsidiary; (ii) a subsidiary or its holding company; (iii) a holding company or its subsidiary; (iv) nominees; or (b) in the case of an individual, through (i) any member of his family; (ii) a company or other body corporate controlled directly or indirectly by him, whether alone or with his associates; (iii) any associate of his associates, and a person shall be deemed to be a member of a family if he is the parent, spouse, brother, sister, child, uncle, aunt, nephew, niece, stepfather, stepmother, stepchild or adopted child of the person Rev.

2012] Insurance CAP.

487 41 concerned, and in the case of an adopted child his adoptive parents.

(5) A registered insurer who permits his paid-up capital to fall below the minimum prescribed under subsection (1) commits an offence and is liable on conviction to a penalty of one hundred thousand shillings and if the offence is a continuing to a further ne of ve thousand shillings for everyday during which the offence continues.

(6) Notwithstanding any other penalty imposed under this section, the convicted insurer shall be liable to having its registration cancelled.

24.

(1) A person carrying on insurance business on the appointed Extension of time.

date who does not meet the requirements of sections 22 and 23 18 of 1986, Sch.

(regarding controlling interests and paid up capital) may be registered, or his registration may be renewed, as the case may be, without complying with the requirements of those sections subject to the following conditions (a) he shall comply with the requirements of sections 22 and 23 before the expiry of three years from the appointed date: Provided that the Minister may, if satised that in spite of his best efforts he has not been able to comply with the necessary requirements, grant extension of the period by a period or periods not exceeding one year at a time, but the total length of those extended periods shall not exceed two years; (b) he shall not, in respect of the period up to the period stated above including all the extended periods, where he has paid up share capital, declare a dividend exceeding ten per cent per annum on the paid up value of the shares.

(2) On the expiry of the period mentioned in subsection (1), including the total of any extended periods, if the person has failed to comply with the requirements of sections 22 and 23 which may be applicable to him, his registration shall stand cancelled with immediate effect and the provisions of subsections (3), (4) and (5) of section 196 shall apply as if the registration has been cancelled under paragraph (a) of subsection (2) of that section and the cancellation has taken effect as on the expiry of that period, including the total of any extended periods.

25.

(1) No insurer being a company limited by shares shall be Requirements as to registered to carry on insurance business unless he satises all the capital structure and following conditions voting rights.

CAP42.

487 Insurance [Rev.

2012 (a) that the capital of the company consists only of ordinary shares each of which has a single face value; (b) that, except during any period not exceeding one year allowed by the company for payment of calls on shares, the paid-up amount is the same for all shares, whether existing or new: Provided that the conditions specied in this subsection shall not apply to an insurer who has, before the commencement of this Act, issued shares other than ordinary shares each of which has a single face value, or shares the paid-up amount whereof is not the same for all of them, for a period of three years from that commencement.

(2) Notwithstanding anything to the contrary contained in any law for the time being in force or in the memorandum or articles of association of an insurer referred to in subsection (1), but subject to the other provisions of this section, the voting rights of every shareholder of the insurer shall in all cases be strictly proportionate to the paid-up amount of the shares held by him.

(3) No insurer shall after the commencement of this Act be newly registered for carrying on any class of insurance business if he has issued shares other than ordinary shares of the nature specied in subsection (1).

(4) Subject to the other provisions contained in this Act, but not withstanding anything contained in the Companies Act, or in the memorandum or articles of association of an insurer referred to in subsection (1), no insurer shall, except with the prior written approval of the Commissioner, register the transfer of any shares where the transfer has the effect of reducing the proportion of share holding of citizens of Kenya in the insurer required by section 22 or 23.

Provisions relating to 26.

(1) A person registered as an insurer under this Act shall be carrying on of both entitled to carry on only the class or classes of insurance business for long term and general which he has been registered.

insurance business.

(2) In the case of an insurer registered to carry on both long term insurance business and general insurance business, the assets of the statutory funds established under section 45 in respect of long term insurance business shall be as absolutely the security of the policy holders of the long term insurance business as though the statutory funds belonged to an insurer carrying on no other business than long term insurance business and shall not be liable for any contracts of the insurer for which the statutory funds would not have been liable had the business of the insurer been only long term insurance business and, Rev.

2012] Insurance CAP.

487 43 notwithstanding the Companies Act, shall not be applied directly or indirectly, either during the winding up or otherwise, for any purpose other than those of the long term insurance business of the insurer.

27.

A person being a body corporate incorporated in Kenya with One third of boards or without a share capital shall not be registered or shall not have his to be citizens of registration renewed, as the case may be, and if registered shall have his Kenya.

registration cancelled, if at least one third of the members of his board 12 of 1994, s.

6.

of directors or managing board are not citizens of Kenya.

27A.

A person shall not be registered under section 31 unless Qualications of board members.

(a) the board of directors or managing board of such person 9 of 2003, s.

3, 9 of 2007, s.

55.

comprises at least ve members; and (b) the Commissioner is satised that all members of such board have knowledge and experience in matters relating to insurance, actuarial studies, accounting, nance or banking.

(c) all the members of such Board have in writing addressed to the Commissioner signifying their acceptance to serve on the Board.

28.

(1) No person shall be registered under section 31, or if Minimum assets in registered shall have the registration renewed except a person having Kenya.

in Kenya the minimum admitted assets prescribed in the Schedule.

12 of 1994, s.

7.

(2) The Minister may, by order published in the Gazette, amend the Schedule.

29.

(1) Subject to subsection (3) of this section, no person shall Appropriate be registered under section 31 except a person who has arrangements, insurance being arrangements approved by the Commissioner for reinsurance arrangements.

of liabilities in respect of which persons, property or interests are, or are to be, insured by the insurer in the course of carrying on insurance business.

(2) The Commissioner shall not approve arrangements for reinsurance made or proposed to be made unless the amount of premium and commission to be paid or the manner in which the amount of premium and commission are to be ascertained are specied in the contract of reinsurance.

(3) The Commissioner shall not approve arrangements for reinsurance where, in the opinion of the Commissioner, the retention limits are too low or too high.

CAP44.

487 Insurance [Rev.

2012 (4) The Commissioner may, in determining whether to approve arrangements for reinsurance made, or proposed to be made, by an insurer, have regard to all matters that he considers relevant and in particular to (a) the class or classes of insurance business carried on or proposed to be carried on by the insurer; (b) the amount of premium received by or due to the insurer during his last preceding nancial year in respect of each class of insurance business carried on by him; (c) the amount of premiums expected by the insurer during the next nancial year in respect of each class of insurance business to be carried on by the insurer; (d) the size of contingency loading which can be built into the premium rates of the insurer; (e) the amount of reinsurance commissions received by or due to the insurer during his last preceding nancial year in respect of each class of insurance business carried on by the insurer; (f) the amount of reinsurance commissions expected to be received by the insurer during the next nancial year in respect of each class of insurance business to be carried on by the insurer; (g) the price of reinsurance; (h) the nature and value of the assets of the insurer; (i) the capital reserves of the insurer and cost of servicing capital, investment policy and investment income; (j) probability, number and size of losses expected and risk characteristics of the insurers portfolio; (k) inter-dependence of exposure units; and (l) the person or persons by whom the reinsurance is or is proposed to be undertaken.

(5) The Minister, having regard to such matters as he considers relevant, may, by notice in writing, exempt an insurer, subject to such Rev.

2012] Insurance CAP.

487 45 terms and conditions and for such period as he species in the notice, from the requirements of subsection (1).

30.

An application for registration as an insurer shall be in the Application for prescribed form and shall be accompanied by registration.

(a) a copy of the memorandum of association or other instrument or document by which the applicant is constituted; (b) a copy of the articles of association or other rules of the applicant; (c) a certied copy of the published prospectus, if any; (d) a copy of each of the proposal and policy forms, endorsements and any form of written matter describing the terms or conditions of or the benets to or likely to be derived from policies or intended to be used by the applicant; (e) statements of the premium rates, advantages and terms and conditions to be offered in connection with insurance policies and details of the bases and formulae from which those rates have been calculated together with a certicate in connection with long term insurance business by an actuary that such rates, advantages, terms and conditions are sound and workable; (f) a detailed statement of assets and liabilities in Kenya at the date of application; (g) a description of all reserves made by the insurer with detailed descriptions of the method, basis and formula for calculating each of the reserves; (h) a certicate from the Central Bank of Kenya specifying the amounts and details of deposits under section 32 made by the applicant; (i) certied copies of reinsurance contracts; (j) the prescribed fee; (k) such proposals as to the manner in which it proposes to carry on business and such nancial forecasts and other documents and information, if any, as may be prescribed.

CAP46.

487 Insurance [Rev.

2012 Opening of a 30A.(1) An insurer registered under this Act wishing to open a baranch.

branch or a new place of business in Kenya, or to change the 4 of 2012, s.33.

location of a branch, or an existing place of business, shall apply to the Authority for approval to do so.

(2) In considering an application under subsection (1), the Authority shall take into account (a) the history and nancial condition of the insurer; (b) the adequacy of the capital base and the structure of the insurer; (c) the viability and earning prospects of the branch; and (d) such other matter as may have a bearing on the insurer or the proposed branch.

(3) There shall be payable, in respect of every application under subsection (1), a fee of twenty thousand shillings.

(4) For the purposes of this section branch means any permanent premises, other than its head ofce, at which an insurer transacts business in Kenya.

Registration.

31.

Where the Board is satised that 12 of 1987, s.

4, (a) the applicant has the share capital and assets, as the case 9 of 2003, s.

4, may be, required by sections 22 and 23; 11 of 2006, s.

12.

(b) the deposit required by section 32 has been made; (c) the applicant has adequate reinsurance arrangements or has been granted an exemption under section 29; (d) the applicant has adequate reserves and the methods of calculating the reserves are satisfactory; (e) the applicant has adequate assets in Kenya; (f) the volume of business which is likely to be available to, and the earning prospects of, the applicant are adequate; (g) the applicant is, and is likely to continue to be, able to comply with such of the provisions of this Act and regulations and directions made or issued under this Act as are applicable to the applicant; Rev.

2012] Insurance CAP.

487 47 (h) the applicant has an adequate number of technically qualied and otherwise competent staff, including Application for registration.

(i) at and proper principal ofcer who holds a technical or professional qualication in insurance, accounting or banking approved by the Commissioner, and who has more than ten years experience in a managerial capacity in the respective sector; and (ii) a management staff comprising persons who hold technical or professional qualications in insurance, accounting or banking approved by the Commissioner and who have more than ve years experience in the respective sector, the Board shall, subject to such terms and conditions as it may consider necessary, approve the registration of the applicant in respect of such class or classes of insurance as it may direct, and shall notify the Minister accordingly.

Part IVdePosIts 32.

(1) Subject to subsection (2), an insurer applying for Deposits.

registration under this Act shall deposit and keep deposited with 8 of 1996, s.

50, the Central Bank of Kenya (in this Part called the Bank), in Kenya 6 of 2001, s.

6.

Government securities estimated at the market value of the securities 7 of 2002, s.

54.

on the day of deposit (a) where the application is in respect of long term insurance business, a sum of ve million shillings or ve percentum of the admitted assets whichever is the higher; (b) where the application is in respect of general insurance business, a sum of ve million shillings or ve percentum of the admitted asset whichever is the higher: (c) (Deleted by 7 of 2002, s.

54).

(2) Where an applicant under subsection (1) was carrying on insurance business immediately prior to the appointed date he may deposit with the Bank in Kenya Government securities a sum of one hundred and fty thousand shillings in respect of long term business and a sum of fty thousand shillings in respect of general business; and if the applicant is registered he shall deposit annually thereafter further Kenya Government securities of the same amounts in respect of each of the two classes of business aforesaid, until the deposit reaches the CAP48.

487 Insurance [Rev.

2012 value specied in subsection (1) for the class or classes of business for which the applicant is registered.

(3) If any part of a deposit made under this section is used in the discharge of any liability of the insurer, the insurer shall deposit such additional sum in securities (estimated at the market value of the securities on the day of deposit) as will make up the amount so used and, unless the deciency is supplied within a period of two months from the date when the deposit or any part thereof is used for discharge of liabilities, the insurer shall be deemed to have failed to comply with the requirements of subsection (1).

Return of deposits if 33.

(1) A deposit made under section 32 shall be returned by the unregistered.

Bank if the application for registration as an insurer not approved by 12 of 1987, s.

11, the Board.

11 of 2006, s.

13.

(2) Subject to section 40 (2), no deposit made in respect of a class of insurance business shall be refunded so long as the insurer carries on that business.

Deposits to be kept 34.

Where the Minister approves an application for registration by Bank on behalf of under section 31, a deposit made under section 32 shall be held by the insurer.

Bank on behalf of the insurer and any interest due and collected by the 12 of 1987, s.

11.

Bank on a deposit shall be paid to the insurer.

Substitution of 35.

An insurer may at any time replace any securities deposited deposits.

by him under this Part by other securities so long as the value of the other securities estimated at the market rates prevailing at the time of replacement is not less than the value of the securities replaced estimated at the market rates prevailing when they were deposited.

Investment of amount 36.

The Bank shall, on the written application of an insurer, invest deposited.

in Kenya Government securities the whole or any part of the amount received on the redemption of a deposited security.

Variation of deposits.

37.

(1) An insurer may require the Bank to sell any deposited security and to invest the net proceeds of the sale in such Kenya Government security as the insurer may direct and the new security shall be deemed to form part of the deposit under section 32.

(2) If the amount realized by the sale of or on the maturing of the securities (excluding in the former case the interest accrued) falls short of the market value of the securities at the date on which they were deposited with the Bank, the insurer shall make good the deciency by a further deposit in securities estimated at the market value of the securities on the day on which they are deposited, within a period of two months from the date on which the securities matured or were sold, and Rev.

2012] Insurance CAP.

487 49 unless he does so the insurer shall be deemed to have failed to comply with the requirements of section 32 as to deposits.

38.

(1) A deposit made by an insurer shall be deemed to be part Use of Deposit.

of the assets of the insurer, but shall not (a) be capable of being transferred, assigned, or encumbered with a mortgage or other charge, by the insurer; (b) be available for the discharge of a liability of the insurer other than liability in respect of a policy of insurance issued in Kenya by the insurer; (c) be liable to attachment in execution of a judgment except a judgment obtained by a policy holder of the insurer in respect of a debt due upon a policy of insurance issued in Kenya and which debt the policy holder has been unable to recover in any other way.

(2) Where a deposit is made in respect of long term insurance business, it shall not be available for the discharge of a liability of the insurer other than a liability arising out of a policy of long term insurance issued by the insurer.

39.

Where the Minister is satised that an insurer has ceased to Return of deposit.

carry on in Kenya any class of insurance business in respect of which he 12 of 1987, s.

11.

has been registered and that all his liabilities in Kenya in respect of that business have been satised or otherwise provided for, the Bank shall on the application by that insurer and on the approval of the Commissioner return to the insurer such part of the deposit as is not required in respect of any other class of insurance business carried on by the insurer.

40.

(1) Where upon examination of a return, reinsurance document Increase of deposit.

or other document of or furnished by an insurer, it appears to the Commissioner that a deposit made under section 32, or the value of the assets of the insurer in Kenya, is disproportionately low in relation to the amount of insurance business carried on by that insurer in Kenya, or that it is in the opinion of the Minister desirable for the protection of policy holders, the Minister may, after giving the insurer a reasonable opportunity of making representations, require the insurer to make an additional deposit of such sum as he shall specify not exceeding in the case of general insurance business twenty per cent, and in the case of long term insurance business ten per cent, of the premiums paid or payable in respect of policies of insurance issued in the nancial year of the insurer immediately preceding the year in which the additional deposit is required to be made.

CAP50.

487 Insurance [Rev.

2012 Provided that the total deposits including the additional deposit shall not exceed three million shillings in the case of general insurance business and three million shillings in the case of long term insurance business.

(2) An additional deposit made in accordance with subsection (1), or any part thereof, which is in the opinion of the Commissioner no longer required shall be refunded to the insurer either on the application of the insurer or on the initiative of the Commissioner.

(3) Subject to subsection (2), an additional deposit required to be made under subsection (1) shall be deemed to be a deposit made under section 32 and the provisions of this Part applicable to deposits shall apply to that additional deposit.

Part Vassets, lIabIlItIes, solVenCy margIns and InVestments Margin of solvency.

41.

(1) An insurer carrying on in Kenya long term insurance 12 of 1994, s.

8, business but not general insurance business shall keep at all times 8 of 1996, s.

51, total admitted assets of not less than his total admitted liabilities and 7 of 2002, s.

55, 9 of 2007, s.

56, ten million shillings or ve percentum of the total admitted liabilities, 8 of 2009, s.

47.

whichever is the higher.

(2) An insurer carrying on in Kenya general insurance business but not long term insurance business shall keep at all times admitted assets of not less than the aggregate value of his admitted liabilities and ten million shillings, or fteen per cent of his net premium income during his last receding nancial year, whichever is the greater.

(3) An insurer carrying on both long term and general insurance business shall at all times maintain separate margins of solvency in accordance with subsections (1) and (2): Provided that assets other than those representing the fund or funds maintained by the insurer in respect of his long term insurance business, if they are not included among the assets covering their liabilities and the margin of solvency relating to the insurers general insurance business, may be included among the assets taken into account in covering the liabilities and the margin of solvency for the insurers long term insurance business.

(4) For the purposes of this section, in the case of long term insurance business the amount of liabilities in respect of the policies of the business at any time shall be the amount of the liabilities at that time as determined by an actuary which shall not be less than that calculated on the minimum bases prescribed.

Rev.

2012] Insurance CAP.

487 51 (5) An insurer failing to comply with the requirements of subsection (1), (2) or (3), as the case may be, shall be deemed to be unable to pay his debts within the meaning of section 219 of the Cap.

486.

Companies Act.

(6) The Minister, having regard to such matters as he considers relevant, including the date of incorporation of an insurer, may by notice in writing allow time for an insurer, subject to such terms and conditions as may be specied in the notice, to comply with the requirements of subsection (1), (2) or (3).

(7) Nothing in this section shall be taken as affecting the manner in which, on a winding up, any assets or liabilities are required to be dealt with whether by virtue of section 46 or otherwise.

(8) Where the assets of an insurer include an investment in the form of cash with, loan to, debenture of, share in, or other form of investment in, an organization and where in respect of long term insurance business or general insurance business the total value of all such investments in that organization together with the value of such investments in all other organizations related to it exceeds ve per cent of the total value of all the admitted assets of the insurer in the particular class of insurance referred to, any excess of the total value of all the investments over ve per cent shall, for the purpose of ascertaining the value of the admitted assets of the insurer relating to the particular class of insurance business or the purpose of ascertaining compliance with the requirements of subsection (1), (2) or (3), as the case may be, be ignored: Provided that (a) this subsection shall not apply to (i) buildings and other real property owned by the insurer jointly with any organization: (ii) investments referred to in section 50 (3); (iii) cash held by banks on behalf of the insurer in current or savings accounts, or subject to section 50 (4) (g), xed deposits.

(b) investments of long term insurance business in a company or a group of companies which is a bank or a nancial institution, or a group of banks or nancial institutions shall, pursuant to section 50(10), not exceed ten percent.

CAP52.

487 Insurance [Rev.

2012 (9) For the purposes of this section (a) the amount of liabilities shall be determined in accordance with regulations; and (b) subject to subsection (8), the assets that may be taken into account and their value shall be determined in accordance with regulations, which may prescribe the extent, if any, to which any particular asset may be taken into account, the depreciation that should be provided for each category of asset and any other relevant factor.

(10) The paid-up capital of an insurer shall at all times, be not less than ten per cent of the total gross premium written by an insurer in respect of general insurance business during the nancial year in question: Provided that if at any time insurer does not meet the minimum ratio of paid-up capital to the total gross premium, the insurer shall, within six months after the end of the nancial year to which it relates, increase the paid-up capital to restore the prescribed minimum ratio.

(11) An insurer who fails to increase the paid-up capital as required under subsection (10) shall be liable to a penalty of one hundred thousand shillings and to a further penalty of ve thousand shillings for every day after the expiry of the period prescribed during which such failure continues, which penalty shall be paid by a crossed bankers draft or cheque drawn in favour of the Permanent Secretary to the Treasury.

(12) For the purposes of determining the solvency of an insurer, every registered insurer shall for the period ending on the 31st December in each year, make a return in the prescribed form, showing his total assets, total admitted assets, total liabilities and such other details as may be prescribed, which shall be signed by the principal ofcer of the insurer and an auditor and submitted to the Commissioner on or before the 30th June of the following year.

Admitted assets.

42.

(1) For the purposes of this Act, a reference to admitted assets 12 of 1994, s.

9, includes a reference to any property, security, item or interest of a person 4 of 2004, s.

76, approved by the Commissioner but does not include a reference to 10 of 2010, s.

53.

(a) an unsecured or, in the opinion of the Commissioner inadequately secured loan; (b) an asset that is mortgaged or charged for the benet of Rev.

2012] Insurance CAP.

487 53 a person other than the insurer to the extent that it is so mortgaged or charged; (c) a loan to, debenture of, or share in any insurer who is related to such a person; (d) (Deleted by 10 of 2010, s.

53.); (e) a guarantee given to the insurer other than a bank guarantee issued by a bank licensed under the Banking Act or a guarantee given by a reinsurer in that course of reinsurance transactions; (f) an intangible asset; (g) unsecured loans to intermediaries; (h) prepaid preliminary and organizational expenses; (i) (Deleted by 4 of 2004, s.

76.); (j) such other assets as may be prescribed.

(2) Where an insurer requests the Commissioner to approve as an admitted asset the whole or part of an asset excluded in subsection (1), the Commissioner may by notice in writing given to the insurer approve the asset, or such part thereof as he determines, accordingly.

Admitted liabilities.

43.

(1) For the purposes of this Act, a reference to admitted liabilities of an insurer means liabilities shown as current, contingent and prospective liabilities in the accounts of an insurer and includes, in the case of long term insurance business, the liabilities in respect of the policies of long term insurance business.

(2) For the purposes of this Act, a reference to admitted liabilities does not include a reference to (a) a liability in respect of share capital or a reserve in lieu of capital approved by the Commissioner; (b) a liability in respect of such matters as the Commissioner may by notice in writing direct; (c) a liability prescribed.

(3) An insurer shall make adequate provision in his accounts for liabilities in respect of unexpired risks and outstanding and CAP54.

487 Insurance [Rev.

2012 incurred claims, including provision for claims incurred but not reported, computed in accordance with a method approved by the Commissioner.

Assessment of assets 44.

(1) The Commissioner may, by notice in writing served on an and liabilities.

insurer, require the insurer to furnish him with such information with respect to any liability of the insurer or value of an asset of the insurer as he species in the notice.

(2) Where the Commissioner is not satised that the value of a liability or asset of the insurer as determined by the insurer has been correctly determined, he may, after giving the insurer an opportunity of making representations, by notice in writing served on the insurer, require the insurer to produce a valuation of the liability or asset worked out by an independent valuer approved by the Commissioner.

Establishment of 45.

(1) An insurer carrying on long term insurance business in statutory fund.

Kenya on the appointed date shall, as at the date of commencement 12 of 1994, s.

10.

of his nancial year next after the appointed date, and every insurer commencing long term insurance business in Kenya after the appointed date shall, as at the date of commencement of that business, establish and maintain a statutory fund under an appropriate name in respect of the long term insurance business carried on by him.

(2) An insurer may establish and maintain a separate statutory fund, under an appropriate name, in respect of any class or classes of his long term insurance business.

(3) Where an insurer carries on long term insurance business of more than one class, the Commissioner may in writing direct the insurer (a) to establish, maintain and appropriately name one or more separate statutory funds in respect of any class or classes of long term insurance business carried on by him; (b) to maintain an account in respect of each of those classes of long term insurance business and to carry and enter the receipts of each of those classes of business in the account maintained by him.

(4) All amounts received by an insurer in respect of any class of long term insurance business, after the establishment by the insurer of a statutory fund under this section, shall be carried to that fund.

(5) Where, at any time Rev.

2012] Insurance CAP.

487 55 (a) an insurer is maintaining more than one statutory fund in respect of his long term insurance business; and (b) a particular policy ceases to be included in the class of the long term insurance business of the insurer in respect of which one of the statutory funds is maintained (in this subsection referred to as the rst fund) and commences to be included in the class of the long term insurance business of the insurer in respect of which another of the statutory funds is maintained (in this subsection referred to as the second fund), the insurer shall forthwith transfer from the rst fund to the second fund assets equal to the liability on the policy at that time as ascertained by an actuary and approved by the Commissioner.

(6) The income arising from the investment of the assets of a statutory fund shall be carried to and form part of that fund.

(7) The assets of each statutory fund shall be kept distinct and separate from all other assets of the insurer.

(8) An insurer carrying on long term insurance business shall maintain such books of account and other records as are necessary for identifying (a) the assets representing each statutory fund maintained by the insurer under this section; (b) the liabilities attributable to that class or, as the case may be, each of those classes of long term insurance business.

46.

(1) Subject to this Act, no part of the assets of a statutory fund Application of shall, so long as the insurer carries on the class or classes of long term statutory fund.

insurance business in respect of which the fund was established- 8 of 1991, s.

81, 9 of 1992, s.

59, 12 of 1994, s.

11, (a) be available to meet any liabilities or expenses of the insurer 8 of 1996, s.

52, other than 4 of 1999, s.

72A.

(i) liabilities or expenses referable to that class of long term insurance business; and (ii) liabilities charged on those assets or any of them immedi- ately prior to the appointed date, or be otherwise directly or indirectly applied for any purpose other than the pur- pose of that class of long term insurance business; CAP56.

487 Insurance [Rev.

2012 (b) be (i) paid, applied or allocated as dividends or otherwise as prots to shareholders; or (ii) transferred to another statutory fund.

(2) A mortgage or charge (including a charge imposed by a court on the application of a judgment creditor) shall be void to the extent to which it contravenes subsection (1).

(3) A person who contravenes subsection (1) shall be guilty of an offence and liable to a penalty not exceeding twenty thousand shillings and, if he is a natural person, additionally or in the alternative to imprisonment for a term not exceeding two years.

(4) Every director and principal ofcer of an insurer shall be under the same liability, in the event of a contravention of subsection (1), as if he had been a trustee under a trust for the execution of those provisions in respect of that fund, and as if the appropriate policy holders had been beneciaries of such a trust, unless the director or principal ofcer proves that the contravention occurred without his knowledge and that he used all due diligence to prevent the contravention.

(5) Notwithstanding subsection (1), an insurer may, for the purposes of declaring or paying a dividend to shareholders or a bonus to policy holders, utilize the surplus disclosed in the valuation balance sheet of a statutory fund set out in the actuarys abstract relating to an investigation made in pursuance of section 57 and accepted by the Commissioner, subject to the condition that the amount allocated or paid to the shareholders out of a statutory fund shall not exceed thirty percent of the surplus disclosed therein after making the necessary adjustments to the surplus.

(6) The adjustments referred to in subsection (5) are (a) the actual amount of income tax deducted at source during the period following the date on which the last preceding investigation was made and preceding the date on which the investigation in question is made may be added to the surplus after deducting an estimated amount of income tax on the surplus, the addition and deduction being shown in the abstract prepared by the actuary; (b) the surplus may be increased by contributions out of a reserve fund subject to the condition and only to the extent that the reserve fund has been made up solely of transfers from similar surpluses disclosed by investigations Rev.

2012] Insurance CAP.

487 57 in respect of which the returns have been accepted by the Commissioner.

(7) Notwithstanding anything to the contrary contained in this section, an insurer carrying on long term insurance business may declare an interim bonus or bonuses to policy holders whose policies mature for payment by reason of death or otherwise during the inter-investigation period on the recommendation of the investigating actuary made at the last preceding investigation.

47.

(1) Unless the Minister directs otherwise, none of the assets in Assets to be in the Kenya of an insurer shall, except in the case of assets required by law name of insurer.

or by a requirement imposed by the Minister under subsection (3) to be invested in trustees, be kept otherwise than in the name of the insurer.

(2) Nothing contained in subsection (1) shall be deemed to prohibit the endorsement in favour of a bank of any security or other document solely for the purpose of collection or realization of any interest, bonus or dividend.

(3) The Minister may direct that the whole or a specied portion of the assets of an insurer shall be held by a person approved by him as trustee of the insurer.

(4) Assets of an insurer held by a person as trustee for an insurer shall be held by him in compliance with a direction given under this section if, and only if, they are assets in whose case the insurer has given him written notice that they are to be held by him in compliance with such a requirement, or they are assets into which the rst-mentioned assets have been transposed by him on the instructions of the insurer.

(5) No assets held by a person as trustee for an insurer in compliance with a direction given under this section shall, so long as the direction is in force, be released except with the consent of the Minister.

(6) If a mortgage or charge is created by an insurer at a time when there is in force a direction imposed on the insurer by virtue of this section, being a mortgage or charge conferring a security on any assets which are held by a person as trustee for the insurer in compliance with the direction, the mortgage or charge shall, to the extent that it confers such a security, be void against the liquidator and any creditor of the insurer.

48.

(1) Subject to subsection (2) of this section, and sections 41 Investment of assets.

and 50 and subject to any provisions in the instruments constituting 12 of 1994, s.

12.

the insurer or in the articles of association or other rules of the insurer CAP58.

487 Insurance [Rev.

2012 which impose restrictions upon the manner in which the assets of the insurer may be invested, the assets of an insurer shall, with sufcient regard to considerations of security, liquidity and income, be invested in Kenya in such manner as the insurer thinks t: Provided that the assets of a statutory fund shall not, without the written approval of the Commissioner, be invested directly or indirectly in any share or interest in any other insurer.

(2) Notwithstanding the provisions of subsection (1), the Commissioner with the prior approval of the Minister may, if he deems it appropriate and subject to sufcient considerations of security, liquidity, income and diversication and to such further conditions as he considers necessary, authorize the assets of an insurer or to be invested outside Kenya.

Unsuitable 49.

If at any time the Commissioner considers an investment investments.

constituting an insurers assets to be unsuitable or undesirable, he may after giving notice to the insurer stating the grounds on which he proposes to exercise his power under this section and giving the insurer an opportunity of being heard, direct the insurer to realize the investment, and the insurer shall comply with the direction within such time as may be specied in that behalf by the Commissioner.

50.

(1) Subject to subsection (5), the admitted assets of insurer Specied carrying on long term insurance business shall be invested and kept investments.

invested in the following manner 18 of 1986, Sch., 12 of 1994, s.

13, 5 of 1998, s.

52, (a) twenty per cent of the total admitted assets in one or more 8 of 2008, s.

61.

of the securities set out in subsection (3); Provided that fty per cent of such securities are securities of the Government of a duration of two or more years; (b) a further proportion, amounting to not less than sixty- ve per cent, in one or more of the investments set out in subsection (4) (c) the balance, subject to section 48 and the other provisions of this section, in such investments in Kenya as the insurer thinks t.

(2) Subject to subsection (5), the admitted assets of an insurer carrying on general insurance business required by section 41 (2) to be maintained by the insurer shall be invested and kept invested in the following manner Rev.

2012] Insurance CAP.

487 59 (a) ten per cent in one or more of the securities set out in subsection (3); (b) a further proportion, amounting to not less than thirty per cent, in one or more of the investments set out in subsection (4); (c) the balance, subject to section 48 and the other provisions of this section, in such investments in Kenya as the insurer thinks t.

(3) The securities referred to in subsections (1) (a) and (2) (a) are securities of (a) the Government; (b) prescribed statutory bodies; (c) local authorities; (d) any other prescribed organization.

(4) The investments referred to in subsections (1) (b) and (2) (b) are as follows (a) the securities set out in subsection (3); (b) mortgages on unencumbered immovable property in Kenya; (c) debentures secured by a mortgage on unencumbered immovable property in Kenya; (d) debentures, commercial paper, preference shares or ordinary shares of public companies whose shares are quoted in the stock exchange of Kenya; (e) instruments of title to immovable property in Kenya; (f) loans on life assurance policies constituting a liability on Kenya business within their surrender values; (g) deposits in banks or nancial institutions licensed under the Banking Act: Cap.

488.

Provided that CAP60.

487 Insurance [Rev.

2012 (i) where the insurer carries on long term insurance business, the deposits in any one bank or nancial institution shall not exceed ve percent of the total value of the assets of the insurer relating to that business; (ii) where the insurer carries on general insurance business, the deposits in any one bank or nancial institution shall not exceed ten per cent of the total value of the assets of the insurer relating to that business; (h) any other prescribed securities.

(i) promissory notes, bills of exchange or other instruments issued by a company incorporated under the Companies Act: Provided that the promissory notes, bills of exchange or other Cap.

488.

instruments are guaranteed by a bank licensed under the Banking Act.

(5) In respect of an investment falling under paragraph (c) of subsection (1) or paragraph (c) of subsection (2) which does not also come under paragraph (a) or (b) of subsection (1) or paragraph (a) or (b) of subsection (2), the investment shall be made after the appointed date, or, if already existing on the appointed date, shall be continued after one year from the appointed date, only with the consent of all the directors present at a meeting and eligible to vote, special notice of which has been given to all the directors, and all such investments, including investments in which any director is interested, shall be reported without delay to the Commissioner with full details of the investments and the extent of the directors interest therein.

(6) (Deleted by 12 of 1994, s.13).

(7) For the purposes of compliance with the provisions of this section, cash in accounts with banks shall be excluded.

(8) Where an insurer has carried on insurance business in Kenya immediately prior to the appointed date, the provisions of subsections (1) and (2) shall in respect of that insurer come into operation as at the date of the commencement of the nancial year next after the appointed date or, upon the application in writing of any insurer, such other date as the Minister may, subject to such terms and conditions as he considers necessary, in writing notify.

(9) An insurer shall not invest any part of his assets in the shares or debentures or loans of any one company or group of related companies more than Rev.

2012] Insurance CAP.

487 61 (a) in the case of long term insurance business, ve per cent of the total admitted assets relating to that business; or (b) in the case of general insurance business, ve per cent of the total admitted assets relating to that business: Provided that the investments shall be adequately secured by a rst legal charge on unencumbered property in Kenya.

(10) Where a company or group of related companies referred to in subsection (9) is a bank or nancial institution or group of banks or nancial institutions, the percentage under paragraph (b) of that subsection shall be ve per cent: Provided that where an insurer has investments referred to in subsection (9) on the appointed date, he may continue holding those investments notwithstanding that they represent more than ve per cent of the subscribed share capital and debentures of the company or group of companies after a period of two years from the appointed date with the approval in writing of the Minister; and that approval shall be for a period of not more than ve years, but may be renewed by the Minister on its expiry for a further period or further periods of ve years.

(11) Nothing in subsection (9) shall apply to an investment made by an insurer in the shares of another insurer if that other insurer is a company within the meaning of section 2 of the Companies Act and carries on insurance or reinsurance business in Kenya.

(12) Where an investment is in partly paid-up shares the uncalled liability on those shares shall be added to the amount invested for the purpose of computing the percentage referred to in paragraph (a) of subsection (9).

(13) For the purposes of subsections (1) and (2), the amount of any deposit made under section 32 shall be deemed to be assets invested or kept invested in the securities set out in subsection (3).

51.

(1) An insurer may, to secure temporary loans or bank Restriction on overdrafts, mortgage or charge assets not exceeding ten per cent of the mortgages, etc.

of total value of the admitted assets of the insurer.

assets.

(2) Subject to subsection (1), an insurer shall not mortgage or charge any of his assets.

Part VIaCCounts, balanCe sheets, audIt and aCtuarIal InVestIgatIons CAP62.

487 Insurance [Rev.

2012 Separate accounts for 52.

Where an insurer carries on more than one class of long term each class.

insurance business or more than one class of general insurance business, he shall keep separate accounts of receipts and payments in respect of each prescribed class of insurance business carried on by him.

Apportionment 53.

Where a single amount received or paid, whether in respect of between classes.

premiums, investment income, claims, commissions, reinsurance costs, administration costs, taxes or otherwise, is received or paid in respect of more than one class of business prescribed under section 52, and the amount is not otherwise allocatable between the different classes, the insurer shall, for the purposes of this part, apportion the amount in an equitable manner between the classes of insurance business in respect of which it is received or paid.

Accounts and balance 54.

(1) Subject to subsection (3), every insurer incorporated in sheets.

Kenya shall, in respect of all insurance business wherever carried on by 9 of 2003, s.

5, the insurer, after the end of each nancial year, prepare for the year, in 9 of 2007, s.

57, accordance with the prescribed forms, a revenue account for the year, a 57 of 2012, s.

35.

balance sheet as at the end of the year and a prot and loss account for the year, or, in the case of a company not trading for prot, an income and expenditure account of the year: Provided that an insurer shall in respect of every quarter, prepare and submit to the Commissioner, within thity days of the end of the quarter to which it relates, an unaudited revenue account, balance sheet, prot and loss account and statement of admitted assets and admitted liability.

(1A) The revenue account, balance sheet, prot and loss account and nancial statement required to be prepared under subsection (1) shall be prepared in accordance with International Financial Reporting Standards and such accepted Kenyan reporting standards as may be prescribed.

(2) Every reserve shall be calculated in accordance with the method approved for the purpose by the Commissioner.

(3) All amounts which are required to be shown in any account or balance sheet shall be shown in Kenya currency to the nearest shilling.

(4) Notwithstanding the denition of nancial year in section 2, the rst nancial year after the appointed date of an insurer shall mean the period ending on 31st December next after the appointed date.

(5) In subsection (1A), International Financial Reporting Rev.

2012] Insurance CAP.

487 63 Standards means (a) the standards issued by the International Accounting Standards Board of London; or (b) Kenyan accepted standards developed by the Institute of Certied Public Accountants of Kenya.

55.

(1) An insurer shall Accounting records.

9 of 2003, s.

6.

(a) keep such accounting records as correctly record and explain the transactions and nancial position of the insurer with respect to his insurance business; (b) so keep his accounting records as to enable the accounts, reports and statements required under this Part to be prepared; (c) so keep his accounting records as to enable those accounts and statements to be conveniently and properly audited in accordance with this Act.

(2) An insurer shall retain his accounting records kept in accordance with subsection (1) for at least seven years after the completion of the transactions to which they relate.

56.

(1) The accounts of every insurer shall be audited annually Audit and auditors by an auditor.

certicate.

12 of 1994, s.

14.

(2) The auditor shall in a certicate relating to accounts and statements in respect of a nancial year of an insurer, state whether- (a) the accounts and statements to which it relates appear to him to be in accordance with the Act and give particulars of any matters that do not appear to him to be so in accordance; (b) the accounting records of the insurer in respect of that year appear to him to have been properly kept and to record and explain correctly the transactions and nancial position of the insurer and give particulars of accounting records that appear to him not to have been so kept and of transactions that appear to him not to have been so recorded; (c) in respect of that year, he has obtained the information and explanations that he requested and give particulars of information and explanations he requested but did not obtain; CAP64.

487 Insurance [Rev.

2012 (d) he is satised that the accounts and statements referred to in paragraph (a) agree with the accounting records of the insurer and appear to him truly to represent the transactions and nancial position of the insurer in respect of the nancial year to which they relate and, if any of them appear to him to fail so to represent the transactions and nancial position, give particulars of the failure; (e) amounts required to section 53 to be apportioned have been equitably apportioned and if they have not been so apportioned give particulars of the failure; (f) all management expenses wherever incurred in respect of the insurers business, whether directly or indirectly, have been fully debited in the revenue account or prot and loss account as expenses and, if they have not been so debited, give particulars of the amounts not so debited.

(g) every reserve has been calculated in accordance with the method approved for the reserve by the Commissioner and, if they have not been so calculated, give particulars of the reserves not so calculated.

(3) The auditor shall in addition issue in relation to the accounts the certicate required under the Companies Act.

(4) For the purposes of this section every insurer shall appoint annually an auditor qualied under section 161 of the Companies Act and approved by the Commissioner.

(5) If an insurer fails to appoint an approved auditor under subsection (4), or to ll any vacancy for an auditor which may arise, the Commissioner may appoint an auditor and x the remuneration to be paid by the insurer to him.

(6) The Commissioner may require an auditor to undertake the following duties in addition to those prescribed under subsection (2) and (3) (a) to submit such additional information in relation to his audit as the Commissioner may consider necessary; (b) to carry out any other special audit or investigations; and (c) to submit a report on any of the matters referred to in paragraphs (a) and (b) ; Rev.

2012] Insurance CAP.

487 65 and the insurer concerned shall remunerate the auditor in respect of the discharge by him of all or any of such additional duties.

(7) If the auditor of an insurer fails to comply with the requirements of this Act, the Commissioner may remove him from ofce and appoint another person in his place.

(8) A person shall not be qualied for appointment as an auditor of an insurer if he is (a) a director, ofcer or employee of that insurer, or (b) a person who is a partner of a director, ofcer or employee of that insurer, or (c) a person who is an employee or employee of a director, ofcer or employee of that insurer, or (d) a person who is a director, ofcer or employee, of a person related to that insurer, or (e) a person who, by himself, or his partner or his employee, regularly performs the duties of secretary or accountant for that insurer, or (f) a rm or member of a rm of auditors of which any partner or employee falls within the above categories.

(9) (a) No duty to which an auditor of an insurer may be subject shall be regarded as contravened by reason of his communicating in good faith to the Commissioner, whether or not in response to a request made by him, any information or opinion on a matter to which this Act applies.

(b) This subsection applies to any matter of which an auditor becomes aware in his capacity as an auditor or in the discharge of his duties under this Part and which relates to the business or affairs of the insurer.

57.

(1) An insurer who carries on long term insurance business Actuarial investigation.

(a) shall on the 31st December in every year and irrespective of 18 of 1986, Sch., any contrary provision in the articles of association or deed 12 of 1994, s.

15.

of settlement, cause an investigation to be made into his nancial condition in accordance with section 58; and, CAP66.

487 Insurance [Rev.

2012 (b) when such an investigation has been made, or when at any other time an investigation into the nancial condition of the insurer is made with a view to the distribution of prots, or the results of which are made public, shall cause an abstract of the actuarys report of the investigation to be made in such form and containing such matters as may be prescribed: Provided that in the case of an insurer who was carrying on long term insurance business in Kenya immediately prior to the appointed date, the last date as at which the rst investigation after the appointed date should be made shall be a date not later than three years from the appointed date or the date of expiration of ve years from he date as at which the last investigation was made by an actuary before the appointed date, whichever is earlier.

(2) An investigation to which subsection (1) relates shall include (a) a valuation of the liabilities of the insurer attributable to his long term insurance business; and (b) a determination of any excess over those liabilities of the assets representing the fund or funds maintained by the insurer in respect of that business and, where any rights of any long term policy holders to participate in prots relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.

(3) Whenever an investigation to which subsection (1) relates is made, the insurer shall prepare a statement, in such form and containing such matters as may be prescribed, of its long term insurance business as on the date on which the investigation is made.

(4) When an investigation to which subsection (1) relates is made as at a date other than the expiry of a nancial year of the insurer, the accounts for the period since the expiry of the last year of account and the balance sheet on the date as at which the investigation is made shall be prepared and audited in the manner provided under sections 54 and 56.

(5) Subject to section 58, for the purposes of an investigation to which this section relates, the value of any assets and the amount of any liabilities shall be determined in accordance with regulations.

Actuarial valuations.

58.

(1) The provisions of this section apply in relation to valuation 5 of 1998, s.

53.

made, in respect of an insurer carrying on long term insurance business, in pursuance of section 57.

Rev.

2012] Insurance CAP.

487 67 (2) The basis of valuation adopted shall be such as to place a proper value upon the liabilities having regard to the mortality experience among the persons whose lives have been insured by the insurer, to the average rate of interest from investments and the expenses of management (including commission), and shall be such as to ensure that no policy is treated as an asset.

(3) The value placed upon the aggregate liabilities of a statutory fund in respect of policies by reason of the adoption of any basis of valuation shall not be less than it would have been if it had been calculated on the minimum basis prescribed.

(4) The actuary who makes the valuation shall certify whether in his opinion the value placed upon the aggregate liabilities relating to a statutory fund in respect of policies by the valuation is not less than the value which would have been placed upon those aggregate liabilities if it had been calculated on the minimum basis prescribed.

(5) In making a determination in terms of section 57 (2) (b), the actuary shall (a) take necessary steps to ensure that any sum representing expenses of organization or extension, or the purchase of business or goodwill or the intangible assets, are equitably allocated between the different statutory funds and are appropriately deducted from the surplus disclosed in each fund or appropriately added to the deciency disclosed in each fund, as the case may be; (b) satisfy himself that the value of the assets adopted by him are, on the basis of the auditors certicates appended to the balance sheet, fully of the value so adopted; and (c) certify in regard to the matters specied in subsections (2) and (3) and paragraphs (a) and (b) of this subsection.

(6) If the Commissioner considers that an investigation under section 57 does not properly indicate the state of affairs of the insurer due to a faulty basis having been adopted in the valuation, the Commissioner may, after giving the insurer a reasonable opportunity of making representations, cause a further investigation in accordance with section 57 and this section as at a date which he may specify to be made at the expense of the insurer by an actuary appointed by the Commissioner or, if the Commissioner so agrees, by an actuary appointed by the insurer and approved by the Commissioner.

CAP68.

487 Insurance [Rev.

2012 (7) The insurer shall make available to the actuary all documents and information required by him for the purpose of the further investigation or valuation under subsection (6) within such period, not being less than three months, as the Commissioner may specify.

(8) An actuary making an investigation or valuation under subsection (6) shall prepare and attach to his report an abstract and a statement of the long term business of the insurer as for an investigation under section 57.

Returns.

59.

An insurer shall prepare as at the end of each nancial year, 5 of 1998, s.

54.

in respect of that year, statements and certicates in the prescribed form relating to the business carried on during the year and the business in force at the end of the year and shall furnish those statements and certicates, signed in the prescribed manner, to the Commissioner within such time as may be prescribed.

Accounts and 60.

(1) The audited balance sheet, prot and loss account and statements to be revenue account required to be prepared under this Part shall be signed signed.

12 of 1994, s.

16.

by two directors and the principal ofcer of the insurer or, if there is only one director, by that director and by the principal ofcer.

(2) A report or abstract of an actuary made under this Part shall be signed by the actuary who made the investigation or valuation.

(3) A statement or return other than a balance sheet, prot and loss account, revenue account or actuarial report or abstract shall be signed by the principal ofcer.

Submission of 61.

(1) Every account, balance sheet, certicate, abstract, return accounts and or statement required to be prepared or prepared under sections 54, 56, statements.

57, 58 and 59 shall be deposited with the Commissioner within four 12 of 1994, s.

17, months after the end of the period to which they relate: 9 of 2003, s.

7, 9 of 2007, s.

58, 10 of 2010, s.

54, Provided that the insurer shall cause a copy of the audited balance 57 of 2012, s.

36.

sheet deposited with the Commissioner to be published in at least two daily newspapers of national circulation, within thirty days of such deposit.

(2) The Commissioner may on the application of an insurer extend or further extend the time specied in subsection (1) for a period not exceeding three months.

(3) Where on receipt of any of the documents submitted under subsection (1), any account, balance sheet, certicate, abstract, return Rev.

2012] Insurance CAP.

487 69 or statement is found to be incomplete or erroneous or misleading, the Commissioner may reject it and the insurance shall be deemed not to have complied with the requirements of subsection (1) or (2), as the case may be, unless the document is resubmitted within the period specied under those subsections.

(4) Where an insurer fails to submit any document under subsection (1) within the period prescribed in that subsection or in subsection (2), the insurer may make a late submission of the document upon payment of a penalty of two hundred thousand shillings and a further penalty of ten thousand shillings for every day after the expiry of the prescribed period during which the document remains unsubmitted.

(4A) The annual accounts and statement of an insurer shall be in such form as the Authority may, from time to time, require and subject to such conditions as the Commissioner may prescribe, may be submitted through the use of information technology.

(5) The penalty under subsection (4) shall be paid to the Policy Holders Compensation Fund in such manner as may, from time to time, be prescribed by the Authority.

62.

(1) An insurer shall, if so required by the Commissioner Further information.

by notice in writing served on him, furnish, within such period after 12 of 1994, s.

18.

service of the notice, not being less than ten days, as the Commissioner species in the notice, information with respect to such matters relating to an account, balance sheet, certicate, abstract, return or statement deposited by him under this section as he so species.

(2) Where a person fails to comply with the requirements of subsection (1), the Commissioner may decline to accept the document in respect of which the further information was sought, whereupon the document shall be deemed not to have been deposited in terms of this Act.

63.

(1) An insurer shall deposit with the Commissioner a certied Other reports.

copy of every report on the affairs of the concern which is submitted to the members or policy holders of the insurer immediately after its submission to the members or policy holders, as the case may be.

(2) An insurer, being a body corporate incorporated in Kenya, shall deposit with the Commissioner a certied copy of the minutes of the proceedings of every general meeting, as entered in the minute book of the body corporate, within thirty days from the holding of the meeting to which those minutes relate.

CAP70.

487 Insurance [Rev.

2012 Returns sufcient 64.

Where an insurer in any year deposits his accounts and compliance with balance sheet in accordance with the provisions of section 61 then, if Companies Act.

the company at the same time sends a copy of the accounts and balance sheet to the registrar of companies under the Companies Act- (a) section 128 (1) of that Act (which requires certain documents to be included in the annual return made by a company) shall not apply to that company; and (b) the copy of the accounts and balance sheets so sent shall be dealt with in all respects as if it had been sent in compliance with that subsection.

65.

(1) The Commissioner may, if it appears to him that any Rectication of returns.

account, balance sheet, abstract, certicate, statement, return, report or 12 of 1994, s.

19.

other document deposited with him under the provisions of this Act is inaccurate or defective in any respect, require the inaccuracy or defect to be rectied within such time, not being less than ten days as he may specify in writing.

(2) Where a person fails to comply with a direction given under subsection (1), the Commissioner may decline to accept the document required to be rectied, whereupon the document shall be deemed to have not been deposited in terms of this Act.

Penalty for false 66.

If any account, balance sheet, abstract, return, certicate, statements.

statement or other document required to be deposited or deposited under any provision of this Act is false in any material particular to the knowledge of any person who signs it, that person shall be guilty of an offence and liable to a ne not exceeding ten thousand shillings or to imprisonment for a term not exceeding twelve months or to both.

Penalty for failure 67.

(1) An insurer who fails to comply with any requirement to comply with under this Part shall be guilty of an offence and liable to a ne not requirements of Part.

exceeding one hundred thousand shillings; and if the offence is a 12 of 1994, s.

20.

continuing one, to a further ne of ve thousand shillings for every day 8 of 1996, s.

53.

during which the offence continues.

(2) Where a person guilty of an offence under this Part is a natural person, that person shall be liable, in addition to, or in the alternative to, a ne, to imprisonment for a term not exceeding two years.

(3) Where a person guilty of an offence under this Part is a body corporate, then notwithstanding the imposition of any penalty, the commission of that offence shall constitute grounds whereby the Commissioner may apply to the court for the winding up of that body corporate.

Rev.

2012] Insurance CAP.

487 71 Part VIaInsPeCtIon and Control of Insurers 12 of 1994, s.

21.

67A.

(1) The Commissioner may, at any time and from time to Inspection of time, and shall, if so directed by the Minister cause an inspection to insurers.

be made by any person authorized by him in writing, of any insurer 12 of 1994, s.

21, and any other person registered under this Act, of his books, accounts 9 of 2003, s.

8.

and records.

(2) When an inspection is made under subsection (1), the insurer and any other person registered under this Act concerned and every ofcer and employee thereof shall produce and make available to the person making the inspection all the books, accounts, records and other documents of the insurer and any other person registered under this Act and such correspondence, statements and information relating to the insurer and any other person registered under this Act, its business and the conduct as thereof the person as making the inspection may require and within seven days or such longer times as he may direct in writing.

(3) Any failure to produce any books, accounts, records, document, correspondence, statements, returns or other information within the period specied in the direction under subsection (2) constitutes a contravention of the provisions of this Act: Provided that (a) the books, accounts and other documents required to be produced shall not, in the course of inspection, be removed from the premises of the insurer or reinsurer or other premises at which they are produced; (b) the person making the inspection may make copies of any books, accounts and other documents required for the purposes of his report; and (c) all information obtained in the course of the inspection shall be treated as condential and used solely for the purposes of this Act.

(4) The person making the inspection shall submit his report to the Commissioner; and the report shall draw attention to any breach or non-observance of the requirements of this Act and any regulations made thereunder, any irregularity in the manner of conduct of the business of the insurer and any other person registered under this Act or any apparent mismanaging or lack of management skills in that CAP72.

487 Insurance [Rev.

2012 insurer and any other person registered under this Act and any other matter revealed or discovered in the course of the inspection warranting, in the opinion of the person making the inspection, remedial action or further investigation.

Directions to person 67B.

The Commissioner may, by notice in writing, and after giving inspected.

the insurer and any other person registered under this Act a reasonable 12 of 1994, s.

21, opportunity of being heard, require the inspected person to comply by 9 of 2003, s.

9.

such date or within such period as may be specied therein, with such directions as he considers necessary in connection with any matter arising out of a report made under section 67A.

Power of the 67C.

(1) This section applies and the powers conferred by Commissioner subsection (2), may be exercised in the following circumstances to intervene in management.

(a) if the insurer is found to have failed to meet the minimum 12 of 1994, s.

21, solvency margin required under section 41 of the Act; 8 of 1996, s.

54, 11 of 2006, s.14.

(b) if the insurer has failed to submit any of the accounts, returns, statements, actuarial valuations or other reports under Part VI for over six months after the end of the nancial year to which they relate; (c) if the insurer having failed to comply with any requirement of this Act, has continued that failure, or having contravened any provision of this Act, has continued that contravention for a period of six months after notice of such failure or contravention has been given to him by the Commissioner; (d) where, having regard to the nancial circumstances of the person registered, the Commissioner is satised that the person cannot carry on the business, or any part of the business, for which he is registered, as the case may be, in a satisfactory and efcient manner; (e) if an amount due by the insurer under a judgment entered into in an action in Kenya arising out of a policy of insurance issued by the insurer or a contract of reinsurance entered into by a reinsurer, has remained unpaid for three months after the date of the nal adjudication in that action; (f) if the business of the insurer is wholly or is unproportionately reinsured with another person; (g) if an insurer is unable to pay his debts within the meaning of section 220 of the Companies Act; Rev.

2012] Insurance CAP.

487 73 (h) if the insurer is found to have made adequate reserves or to have understated the level of this liabilities; (i) if the insurer is discovered to have submitted or provided any accounts, returns, statements, books, records, correspondence, documents or other information relating to his business which is falls or misleading; or (j) if the Commissioner discovers, whether on an inspection or otherwise, or becomes aware of any fact or circumstance which, in his opinion, warrants the exercise of the relevant power in the interests of the insurer, its shareholders, policy holders, or reinsurer or in the public interest.

(2) The Commissioner may, with the approval of the Board (i) appoint any person ( in this Act referred to as a man- ager) to assume the management, control and conduct of the affairs and business of an insurer to exercise all the powers of the insurer to the exclusion of its board of directors, including the use of its corporate seal; (ii) remove any ofcer or employee ,of an insurer who, in the opinion of the commissioner, has caused or contributed to any contravention of any provisions of this Act, or any regulations or directions made thereunder or to any deterioration in the nancial stability of the insurer or has been guilty of conduct detrimental to the interests of policy-holders or other creditors of the insurer; (iii) appoint three competent persons familiar with the busi- ness of insurers to its board of directors to hold ofce as directors who shall not be removed from ofce without the approval of the Commissioner; (iv) by notice in the Gazette, revoke or cancel any existing power of attorney, mandate, appointment or other author- ity by the insurer in favour of any ofcer, employee or any other person.

(3) The appointment of a manager shall be for such period, not exceeding twelve months, as the Commissioner shall specify in his instrument of appointment and may be extended by the High Court, upon the application of the Commissioner if such extension appears to the High Court to be justied.

(4) A manager shall, upon assuming the management control and CAP74.

487 Insurance [Rev.

2012 conduct of the affairs and business of an insurer, discharge his duties with diligence and in accordance with sound insurance, actuarial and nancial principles and, in particular, with due regard to the interests of the insurer, its policy-holders and the insuring public in general.

(5) The responsibilities of a manager shall include (a) tracing, preserving and securing all the assets and property of the insurer; (b) recovering all debts and other sums of money due to and owing to the insurer; (c) evaluating the solvency and liquidity of the insurer; (d) assessing the insurers compliance with the provisions of this Act and regulations made or directions issued thereunder; (e) determining the adequacy of the capital and reserves and the management of the insurer and recommending to the Commissioner any restructuring or reorganization which he considers necessary and which, subject to the provisions of any other written law, may be implemented by him on behalf of the insurer; and (f) obtaining from any former principal ofcer, director, secretary, ofcer or employee of the insurer any documents, records, accounts, statements, correspondence or information relating to its business; (6) The Manager shall, within a period of twelve months from the date of his appointment, prepare and submit to the Commissioner a report on the nancial position and the management of the insurer with recommendations as to whether (i) the insurer is capable of being revived; or (ii) the insurer should be liquidated.

(7) The Commissioner shall, after taking into account the report of the manager, make appropriate recommendations to the Board, who shall then take a decision on the matter.

(8) Where the Board decides that the insurer should be liquidated, the provisions of the section 123 shall apply.

(9) Neither the Commissioner or any ofcer or employee of the Rev.

2012] Insurance CAP.

487 75 Commissioner, nor any other person appointed, designated or approved by the Commissioner under the provisions of this Part shall be liable in respect of any act or omission done in good faith in the execution of the duties undertaken by him.

(10) For the purposes of discharging his responsibilities, manager shall have power to declare a moratorium on the payment by the insurer of its policy holders and other creditors and the declaration of a moratorium shall (a) be applied equally to all classes of policy holders and creditors, subject to such exemptions in respect of any class of insurance as the manager may, by notice in the Gazette specify; (b) suspend the running of time for the purpose of any law of limitation in respect of any claim by any policy holder or creditor of the insurer; (c) cease to apply upon the termination of the managers appointment whereupon the rights and obligations of the insurer, its policy holders and creditors shall, save to the extent provided in paragraph (b), be the same as if there had been no declaration under the provisions of this subsection.

67D.

(1) Without prejudice to the provisions contained under Part to apply to section 19, the provisions of this Part shall apply to any person who, in unregistered and the opinion of the Commissioner, is, or is deemed or suspected to be unauthorized persons.

carrying on or transacting insurance or reinsurance business without 12 of 1994, s.

21, registration, renewal of registration or authorization under this Act.

9 of 2003, s.

10, 9 of 2007, s.

59, (2) Without prejudice to the provisions of this Part, a person who, 10 of 2010, s.

55.

upon inspection, is found to be (a) transacting insurance business without registration, renewal of registration or authorization, under this Act or with persons not so registered or authorized; or (b) charging a rate of premium other than that led with the Commissioner under section 75, (c) committing any other business malpractices; shall, in addition to any other penalty prescribed under this Act, be liable to pay a penalty of two hundred thousand shillings, which shall be paid to the Policyholders Compensation Fund in such manner as may, from CAP76.

487 Insurance [Rev.

2012 time to time, be prescribed by the Authority.

Powers of inspector.

67E.

(1) An inspector may, by notice in writing, require any person 12 of 1994, s.

21.

who is or has at any time been a director, managing director, secretary, principal ofcer, manager, ofcer or employee, agent , accountant, broker, auditor or actuary of the person being inspected to (a) give to the inspector all reasonable assistance in connection with the inspection; or (b) appear before the inspector for examination concerning matters relevant to the inspection; or (c) produce any books or documents that relate to the affairs of the person being inspected.

(2) A person who (a) refuses or fails to comply with a requirement of an inspector which is applicable to him, to the extent to which he is able to comply with it; or (b) obstructs or hinders an inspector in the exercise of his powers under this Act; or (c) furnishes information or makes a false statement which he knows to be false or misleading in any material particular; or (d) when appearing before an inspector for examination pursuant to such requirement, makes a statement which he knows to be false or misleading in any material particular, commits an offence.

(3) A person convicted of an offence under subsection (2) shall be liable to a ne not exceeding fty thousand shillings or, in the case of a natural person, to imprisonment for a term not exceeding three years, or to both.

(4) Where an offence under subsection (2) is a continuing one, the person shall, in addition to the penalty prescribed under subsection (3), be liable to a further ne of one thousand shillings for every day during which the offence continues.

(5) Where a person convicted under subsection (3) is a body corporate, the Commissioner may, notwithstanding any other penalty Rev.

2012] Insurance CAP.

487 77 imposed under that subsection, apply to court for the winding up of the person.

67F.

Any expenses incurred by reason of the exercise of any of Expenses under Part.

the powers conferred by this Part in respect of an insurer shall be met 12 of 1994, s.

21.

by that insurer.

67G.

(1) The Authority may, for the purpose of protecting the Power to protect the interests of the policy holders, assume control of the whole or part of assets of an insurer.

the insurers assets, and shall register any instrument under the relevant 4 of 2012, s.

34 law or take any other appropriate action it may deem necessary.

(2) The Authority shall hold the directors of the insurer to be jointly and severally liable for the recovery of the assets under subsection (1), where it establishes that the assets of the insurer have been misappropriated.

Part VIImanagement and exPenses 68.

(1) For the purposes of this section registered person means Approved principal a person registered under this Act as an insurer, reinsurer, broker, agent, medical insurance provider, insurance surveyor, risk manager, loss ofcer to be assessor, loss adjuster or claims settling agent.

appointed.

9 of 2003, s.

11, 37 (2) Every registered person shall, at all times while he is so 57 of 2012, s.

registered, have a principal ofcer.

(3) The principal ofcer appointed under subsection (2) shall be ordinarily resident in Kenya and shall be responsible for the general control, direction and supervision of the Kenya insurance business of the registered person and shall represent the registered person for the purposes of this Act.

(4) Everything done by the principal ofcer or a person acting as the principal ofcer of the registered person in his representative capacity shall, for the purposes of this Act, be deemed to have been done by the registered person, but this subsection shall not affect any liability of the principal ofcer or person acting as the principal ofcer under this Act.

(5) Where the principal ofcer is, or is about to be, absent from Kenya for a period exceeding three months or for any reason unable to perform his duties as principal ofcer, the registered person shall, if he does not revoke the appointment and appoint another person under subsection (2) appoint another person (not being a body corporate) resident in Kenya to act as the principal ofcer of the person registered CAP78.

487 Insurance [Rev.

2012 for the purposes of this Act during the absence or inability.

(6) An appointment under this section shall be deemed not to have been duly made or revoked until the registered person has given notice in writing of the appointment or revocation to the Commissioner specifying the name and, in the case of an appointment, the place of residence of the person appointed.

(7) Every notice to the Commissioner regarding the appointment of a principal ofcer shall contain the following particulars (a) full name; (b) date and place of birth; (c) citizenship; (d) academic and professional qualications; (e) work experience giving dates and nature of previous employment; (f) whether he has ever been convicted of an offence involving fraud or dishonesty and if so details of the offence, place and date; (g) whether he has ever been adjudicated bankrupt, applied to take the benet of any law for the relief of bankrupt or insolvent debtors, compounded with his creditors or made an assignment of his remuneration for their benet and, if so, details.

(8) If it appears to the Commissioner that the person appointed as principal ofcer is not at and proper person to be a principal ofcer, the Commissioner may, after giving the person concerned an opportunity of being heard, object to the appointment.

(9) Where the Commissioner objects to the appointment of a principal ofcer he shall record the reasons for his decision and furnish a copy thereof to the registered person who shall forthwith revoke the appointment.

Authority to carry out 68A.

(1) Notwithstanding any other provisions of this Act, the assessment.

Authority shall upon receipt of a requisition signed by not less than ten 57 of 2012, s.

37.

percent of policy holders with the insurers, carry out an assessment of the integrity and moral suitability of the persons managing, controlling or having a signicant ownership or signicant benecial interest in a Rev.

2012] Insurance CAP.

487 79 person licensed under this Act.

(2) An assessment under subsection (1) shall be in accordance with the rules of natural justice, the principles of fair trial and such criteria as may be prescribed in regulations.

(3) Upon an assessment under this section, the Authority shall, within reasonable time, convey its ndings to the insurer and the person licensed under this Act on whom an assessment has been carried out.

69.

(1) Subject to subsection (2), no insurer shall be directed Directors, managers, or managed by, and no insurer shall employ in any capacity, a person employees and their whose remuneration or any part thereof takes the form of commission remuneration.

or bonus or of a share in the valuation surplus in respect of long term 12 of 1994, s.

22.

insurance business.

(2) The prohibition contained in subsection (1) shall not apply to the employment of agents or brokers, or to the employment of persons who share in the prots of general insurance business by way of bonus payments or otherwise.

(3) A managing director or employee of an insurer shall not be a managing director or employee of another insurer or of a bank or nancial institution.

(4) After the expiry of two years from the appointed date no agent, and where the agent is a company or rm, no managing or other director of an agent, and no broker, or managing or other director of a broker shall (a) be appointed or continue as a director of an insurer registered under this Act; (b) directly or indirectly acquire or hold more than one per per cent of the shares or controlling interest in an insurer registered under this Act.

(5) After the expiry of two years from the appointed date, no insurer and no director or employee of an insurer shall directly or indirectly hold shares in or have any other nancial or controlling interest in the affairs of an agent or broker.

(6) A person who contravenes the provisions of this section shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings, and it the offence is a continuing one, to a further ne of one hundred shillings for every day during which the offence continues.

CAP80.

487 Insurance [Rev.

2012 Limitation of 70.

(1) No insurer shall spend in any nancial year as expenses management of management an amount in excess of the prescribed limits, and in expenses.

prescribing those limits regard shall be had to the size and age of the insurer and the provision generally made for management expenses in the premium rates of insurers.

(2) The Commissioner may, in any year, after consultation with the Advisory Board, x for the succeeding year the extent to which the limits prescribed in regulations may be relaxed, and an insurer shall not be deemed to have contravened the provisions of subsection (1) if his expenses of management referred to in that subsection are within those relaxed limits.

Restrictions on loans, 71.

(1) No insurer shall, in Kenya advances, etc.

by (a) grant any loan, advance, nancial guarantee or other credit insurer.

facility against the security of his own shares; or 10 of 2010, s.

56.

(b) grant to or permit to be outstanding without adequate security any loan, advance, nancial guarantee or other credit facility not being a loan against and within the surrender value on a policy of life assurance issued by that insurer, to any shareholder, director, ofcer or employee or member of his family, or to any company of which the shareholder, director, ofcer or employee or member of his family is a shareholder, director, ofcer or employee: Provided that an insurer may grant to an ofcer or employee, on compassionate grounds, an unsecured loan or advance not exceeding one hundred thousand shillings subject to the condition that no further loan or advance shall, at any time, be granted if any previous loan or advance has not been fully repaid.

(2) The provisions of section 191 of the Companies Act shall not apply to a loan granted to a director of an insurer if the loan is one granted on the security of a policy of life assurance on which the insurer bears the risk and the policy was issued to the director on his own life and the loan is within the surrender value of the policy.

(3) Any loan, advance, credit facility, nancial guarantee or other liability granted or permitted to be outstanding in contravention of the provisions of this section and existing on the appointed date shall be notied by the insurer to the Commissioner within thirty days of that date and shall, notwithstanding any contract to the contrary, be repaid or discharged within one year from that date.

(4) Where an event occurs giving rise to circumstances the Rev.

2012] Insurance CAP.

487 81 existence of which at the time of the grant of a subsisting loan, advance, credit facility, nancial guarantee or other liability would have made that grant a contravention of this section, the loan, advance, credit facility, nancial guarantee or other liability shall, notwithstanding anything in the contract to the contrary, be repaid or discharged within three months from the occurrence of that event.

(5) In case of default in complying with the provisions of subsection (3) or subsection (4), a director, ofcer, or employee who may be concerned shall, without prejudice to any other penalty which he may incur, cease to hold ofce under, be employed by or act for, the insurer granting the loan, advance, credit facility, nancial guarantee or other liability on the expiry of the period of one year or three months, as the case may be.

(6) The Commissioner may extend the period of one year referred to in subsection (3) by periods of not more than six months at a time and, where any such extension has been granted, the reference to the period of one year in subsection (5) shall be construed as a reference to the extended period.

72.

(1) No insurer shall on or after the appointed date appoint a Limitation on managing agent for the conduct of his business.

employment of (2) Where an insurer engaged in the business of insurance before managing agents.

the appointed date has employed a managing agent for the conduct of his business then, notwithstanding anything to the contrary contained in the Companies Act, and notwithstanding anything to the contrary contained in the articles of the insurer, or in any agreement entered into by the insurer, the managing agent shall cease to hold ofce on the expiry of his contract of employment or of two years from the appointed date, whichever is earlier, and no compensation shall be payable to him by the insurer by reason only of the premature termination of his employment as managing agent under this subsection.

Part VIIIrates, PolICy terms and ClaIms settlement 73.

(1) No person shall offer, either directly or indirectly, as an Restrictions on inducement to any person to take out or renew or continue a contract of rebates, brokerage, insurance, any rebate of the whole or part of any brokerage, commission etc.

or premium except such rebate as may be allowed in accordance with a9 of 2003, s.

12, published prospectus or manual or schedule of rates of an insurer.

4 of 2004, s.

77.

(2) No insurer shall, in respect of Kenya business, pay to a broker or agent as brokerage, commission, any sum in excess of the amounts prescribed for or in respect of each prescribed class of business placed by that broker or agent with that insurer.

CAP82.

487 Insurance [Rev.

2012 (3) No broker shall, in respect of Kenya business pay to an agent any commission, in excess of what would have been payable had the agent been paid by an insurer instead of by the broker.

(4) Nothing in this section shall prohibit a person obtaining the benet of the commission payable by an insurer to a broker or agent under the relevant prospectus or agents manual or brokers agreement where he takes out life assurance on his own life or on the lives of his dependants directly with the insurer without the services of an intermediary.

(5) A person who contravenes any of the provisions of this section shall be guilty of an offence and liable to a ne not exceeding two hundred thousand shillings.

Premium rates of life 74.

(1) An insurer carrying on long term insurance business shall insurers.

not issue, after the expiry of three months from the appointed date, 18 of 1986, Sch.

any policy of insurance unless the rate of premium chargeable under the policy is a rate which has been approved by an actuary as suitable for the class of policies to which that policy belongs and that rate and the actuarial bases therefor together with the actuarys certicate have been led with the Commissioner at least thirty days before giving effect to the rate.

(2) The Commissioner may require the insurer to obtain, and to furnish him within such time as he may specify, with a report by an actuary as to the suitability of the rate of premium chargeable under any class of policy issued by the insurer and, if the actuary considers that the rate is not suitable, a report as to the rate of premium which the actuary approves as suitable in respect of that class of policy.

(3) Where a requirement is made under subsection (2) in respect of the rate of premium chargeable under any class of policy the insurer shall not issue, after the expiry of the period specied by the Commissioner, any policy of that class until the insurer has in accordance with the requirement obtained the approval of the actuary to the rate of premium, and notied the Commissioner that that approval has been obtained.

(4) An actuary in approving a rate of premium in respect of a class of policy under this section shall have regard to the maximum rate of commission or rebate proposed to be paid or allowed to any person in respect of that class of policy.

(5) Where a rate of premium is approved by an actuary in respect of a class of policy, the insurer shall not, except with the approval of the Commissioner, pay or allow in respect of any policy of that class a commission or rebate at a greater rate than- Rev.

2012] Insurance CAP.

487 83 (a) the maximum rate of commission or rebate to which the actuary had regard when approving the rate of premium; or (b) the maximum rate of commission or rebate payable by the insurer immediately prior to the appointed date in respect of policies of that class (if any) issued at the rate of premium so approved, whichever is less.

(6) A person who contravenes any of the provisions of this section shall be guilty of an offence and liable to a ne not exceeding fty thousand shillings, and if the offence is a continuing one, to a further ne of two thousand shillings for every day during which the offence continues.

75.

(1) An insurer carrying on general insurance business premium Premium rates of shall le with the Commissioner, before commencing to carry on that general insurers.

business or before the expiry of three months from the appointed date, whichever is later, a schedule or manual of rates of premium proposed to be used by the insurer for each class of business.

(2) Where a schedule or manual of rates of premium led under subsection (1) is proposed to be altered or revised, the insurer shall le with the Commissioner the details of and the reasons for, the alterations or the revised schedule or manual at least sixty days before giving effect to the alterations or revision.

(3) If an insurer carrying on general insurance business issues any insurance cover outside the scope of the schedule or manual of rates of premium led with the Commissioner or considers it necessary, while using the rate contained in the schedule or manual as the basing point, to deviate therefrom to take account of the proponents or policyholders past and anticipated loss experience, the physical characteristics of the subject matter of the insurance, the nature of the exposure and other relevant factors, the insurer shall le with the Commissioner, within a period of thirty days full details of the rate charged.

(4) The Commissioner may, at any time, require an insurer to furnish him with statistical data and other information on the basis of which any rate or schedule or manual of rates led with the Commissioner has been computed.

(5) The Commissioner may, at any time, require an insurer to modify or revise, within such time as he may specify, the schedule or manual of rates led with the Commissioner or the practice of deviating therefrom or the practice of rating risks outside the scope of the schedule CAP84.

487 Insurance [Rev.

2012 or manual and the insurer shall carry out the required modication or revision within the stipulated time and get them approved by the Commissioner.

(6) A person who contravenes any of the provisions of this section shall be guilty of an offence and liable to a ne not exceeding fty thousand shillings, and if the offence is a continuing one to a further ne of two thousand shillings, for every day during which the offence continues.

Law applicable 76.

(1) The holder of a policy of insurance issued by an insurer to contracts of in respect of insurance business carried on by him in Kenya on or after insurance and place the appointed date shall have the right, notwithstanding any agreement of payments.

to the contrary contained in the policy of insurance or in any agreement relating thereto, to receive payment of any sum secured thereby in Kenya and to sue for any relief in respect of the policy in Kenya; and if action on the policy is instituted in Kenya, any question of law in connection with the policy or proceedings shall be heard and determined according to the law in force in Kenya.

(2) Nothing in this section shall apply to a policy of marine insurance.

Insurance cover upon 76A.

Upon change of ownership of a motor vehicle, an insurer change of ownership shall - of motor vehicle.

8 of 2009, s.

48.

(a) only issue a temporary cover for a period not exceeding 10 of 2010, s.

57.

three months, pending the registration of the motor vehicle in the name of the new owner; (b) not renew the temporary cover or issue any annual policy in respect of the motor vehicle, unless the new owner provides proof of the registration of the motor vehicle in his name by the Registrar of Motor Vehicles.

Defaults of insurer, 77.

Subject to this Act, failure on the part of an insurer, broker or broker or agent not to invalidate policy.

agent to comply with any provision of this Act shall not invalidate any Avoidance of policy issued by an insurer.

contracts for 78.

A contract of insurance entered into after the appointed date unlimited amounts.

shall be void if (a) it is a contract under which the insurer undertakes a liability the amount or maximum amount of which is uncertain at the time when the contract is entered into; and (b) it is not a contract of insurance or a contract of a class or Rev.

2012] Insurance CAP.

487 85 description exempted by regulations or by the Commissioner in writing from the operation of this section.

79.

(1) The sum insured, the premium and every other sum of Amounts and values money mentioned in a policy of insurance issued or renewed on or after in policies to be the appointed date shall be stated in the currency of Kenya unless the expressed in Kenya parties to the policy have, at or subsequent to the time of issue of the currency.

12 of 1994, s.

23 policy, expressly otherwise agreed to, and where the policy was issued 8 of 1997, s.

56.

or renewed on or after the appointed date, the Commissioner has in writing approved, the statement of any sum in some other currency.

Provided that, notwithstanding the provisions of this subsection, an insurer may issue a policy of insurance, or a reinsurer may enter into a reinsurance contract in respect of (a) aviation insurance; or (b) marine insurance; or (c) engineering insurance; or (d) any class or classes declared by the Minister by notice in the Gazette, in which the sum insured, the premium and every other sum of money mentioned in the policy of insurance is stated in currencies other than the currency of Kenya.

(2) If the insurer and policy holder have agreed, and, in the case of a policy issued on or after the appointed date, the Commissioner has approved, that the sum insured, the premium or other sum of money mentioned in a policy of insurance shall be expressed in a currency other than the currency of Kenya, the fact that the parties have agreed and the fact that the approval of the Commissioner has been obtained and the currency adopted shall be stated in or endorsed on the policy in distinct terms and in printed or typed letters no smaller than and as legible as the letters of the other provisions of the policy.

(3) The continued payment in respect of a policy relating to long term insurance business shall not constitute a renewal for the purposes of subsection (1).

80.

(1) A form of proposal for insurance or a policy or an Proposal and policy documents not to be endorsement or any form of written matter used by an insurer describing misleading.

the terms or conditions of, or the benets to be or likely to be derived CAP86.

487 Insurance [Rev.

2012 from, a policy of insurance shall not contain anything inaccurate or incomplete or likely to mislead a proponent or policy holder.

(2) If the Commissioner is of opinion that an insurer has contravened the provisions of subsection (1) he may, after giving the insurer an opportunity of making representations, notify the insurer in writing that he objects to the form.

(3) An insurer shall not accept a proposal or issue any policy or written matter if the proposal, policy or written matter is in a form to which the Commissioner has objected under this section to the extent that the objection has not been varied or set aside as a result of an appeal under section 173.

(4) An insurer who contravenes the provisions of subsection (3) shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings.

Incorrect statements 81.

(1) Notwithstanding anything contained in or incorporated in proposals.

in a contract of life assurance issued before, on or after the appointed date, a policy of life assurance shall not be avoided by reason only of an incorrect statement made in a proposal or other document on the faith of which the policy was issued or reinstated by the insurer, unless the statement was material to the risk of the insurer and (a) was made in the knowledge that it was untrue or with no reasonable belief that it was true; or (b) was made within the period of three years immediately preceding the date on which the policy is sought to be avoided or the date of the death of the life insured, whichever is the earlier.

(2) Where an agent or servant of an insurer writes or lls in, or has before the appointed date written or lled in, any particulars in a proposal for a policy of insurance with the insurer, then, notwithstanding any law and any agreement to the contrary between the proposer and the insurer, a policy issued in pursuance of the proposal shall not be avoided by reason only of an incorrect or untrue statement contained in the particulars so written or lled in, unless the incorrect or untrue statement was in fact made by the proposer to the agent or servant for the purposes of the proposal; and the burden of proving that the statement was so made shall lie upon the insurer.

Effect of suicide or 82.

A policy of life assurance shall not be avoided merely on the capital punishment ground that the person whose life is assured died by his own hand or on policy.

act, sane or insane, or suffered capital punishment, if, upon the true Rev.

2012] Insurance CAP.

487 87 construction of the policy, the insurer has thereby agreed to pay the sum assured in the events that have happened.

83.

A form of proposal shall be framed so as to require a person Particulars as to age making a proposal for a policy of life assurance to specify the place and of proposer for life date of birth of the person whose life is proposed to be assured, and the assurance.

person making the proposal shall supply those particulars to the best of his knowledge and belief.

84.

Where an insurer issued a policy of life assurance which Notice regarding provides that proof of age of the life insured is a condition precedent proof of age.

to the payment of the sum assured, the insurer shall, unless the age of the life assured has already been admitted by it, issue with the policy a printed notice stating that proof of age of the life assured may be required prior to the payment of the sum assured.

85.

(1) If an insurer declines to accept the proof of age tendered in Procedure where respect of a policy of life assurance, whether issued before, on, or after insurer declines to the appointed date, the policy holder may apply to the Commissioner accept proof of age.

for an order directing the insurer to accept the proof tendered.

(2) On any such application, the Commissioner may, after giving the insurer a reasonable opportunity of being heard, make such order in relation to the application as he thinks just.

(3) An order under this section shall be binding on the insurer and shall be complied with on his part.

86.

(1) A policy of life assurance shall not be avoided by reason Misstatement of age.

only of a misstatement of the age of the life assured.

(2) Where the true age as shown by the proofs is greater than that on which the policy was based, the insurer may vary the sum assured by, and the bonuses (if any) allotted to, the policy so that, as varied, they bear the same proportion to the sum assured by, and the bonuses (if any) allotted to, the policy before variation as the amount of the premiums that have become payable under the policy as issued bears to the amount of the premiums that would become payable if the policy has been based on the true age.

(3) Where the true age, as shown by the proofs, is less than that on which the policy was based, the insurer shall either (a) vary the sum assured by, and the bonuses (if any) allotted to, the policy before variation as the amount of the premiums CAP88.

487 Insurance [Rev.

2012 that have become payable under the policy as issued bears to the amount of the premiums that would have become payable if the policy had been based on the true age; or (b) reduce, as from the date of issue of the policy, the premium payable to the amount that would have been payable if the policy had been based on the true age and repay to the policy owner the amount of over-payments of premiums less any amount that has been paid as the cash value of bonuses in excess of the cash value that would have been paid if the policy had been based on the true age.

(4) Notwithstanding subsections (2) and (3), where the correct age is found to be beyond the limits within which the insurer, according to his published prospectus, issues the type of policies in question, the policy shall be void ab initio and the insurer shall refund to the insured all the premiums received on the policy after deducting the commission payments and expenses incurred by him on the policy; but nothing in this subsection shall apply to annuities and other policies where the insured has already received any payment under the policy.

Objection to and 87.

(1) If within twenty eight days after the delivery of an return of life policy.

industrial life assurance policy or an ordinary life assurance policy, where the sum assured is ten thousand shillings or less, by an insurer to the policy holder, or, at the place of abode of the policy holder, to some other person who is an inmate of that place apparently not less than eighteen years of age and by whom any premium in respect of the policy is paid on behalf of the policy holder, the policy holder returns the policy to the insurer with an objection in writing to any term or condition of the policy or a statement that he does not require the policy, the insurer shall forthwith refund any premium which has been paid in respect of the policy which shall thereupon be cancelled.

(2) For the purposes of this section, where a policy is sent by post by an insurer to the person to whom it is issued, it shall, unless the contrary is proved, be deemed to have been delivered to him at the time at which it would reach him in the ordinary course of post.

(3) For the purposes of this section, a policy shall be deemed to have been returned with an objection or statement, as the case may be, if the policy and objection or statement are posted for transmission to the insurer by registered post.

Paid up policies.

88.

(1) A policy holder who desires to discontinue further premium payments on a policy of life assurance on which not less than three years premiums have been paid in cash shall, on application to the insurer, be Rev.

2012] Insurance CAP.

487 89 entitled to receive, in lieu of that policy, a paid-up policy for an amount not less than that determined in accordance with the rules.

(2) The paid up policy shall be payable upon the happening of the contingency upon the happening of which the amount assured under the original policy would have been payable.

89.

(1) The owner of a policy of life assurance which has been Surrender of policies.

in force for at least three years shall, on application to the insurer, be entitled to surrender the policy and to receive not less than the surrender value of the policy less the amount of any debt owing to the insurer under, or secured by, the policy.

(2) In the application of subsection (1) to a paid-up policy which has been issued in lieu of another policy, the period of three years shall be calculated from the date of issue of the original policy.

(3) For the purposes of this section the surrender value of a policy shall be the amount calculated in accordance with the rules.

(4) The Commissioner may, on application by an insurer, if, in his opinion, the payment in cash of surrender values as required by this section would be prejudicial to the nancial stability of the insurer or to the interests of the policy holders of that insurer, suspend or vary for such period and subject to such conditions as the Commissioner thinks t, the obligation of the insurer to pay those surrender values.

Non-forfeiture of ordinary life policies in certain cases of non- payment of premiums.

90.

(1) An ordinary life policy shall not be forfeited by reason Non-forfeiture of only of the non-payment of any premium (in this section referred to as ordinary life policies the overdue premium) if in certain cases of non-payment of (a) not less than three years premiums have been paid in cash premiums.

on the policy; and (b) the surrender value of the policy (calculated as at the day immediately preceding that on which the overdue premium falls due) exceeds the sum of the amount of the debts owing to the insurer under, or secured by, the policy, and the amount of the overdue premium.

(2) The insurer may, until payment of the overdue premium, charge compound interest on it, on terms not less favorable to the policy holder than such terms (if any) as are prescribed.

CAP90.

487 Insurance [Rev.

2012 (3) The overdue premium and any interest charged on it under this section and unpaid shall, for the purposes of this Act, be deemed to be a debt owing to the insurer under the policy.

(4) Without affecting the generality of subsection (1), an ordinary life policy on which not less than three years premiums have been paid in cash shall not be forfeited by reason only of the non-payment of a premium unless, on or after the day on which the premium fell due, the insurer liable under the policy serves a notice on the policy holder stating (a) the amount due or payable to the insurer at the date of the notice in respect of the policy; and (b) that the policy will be forfeited at the expiration of twenty eight days after service of the notice if a sufcient sum is not paid to the insurer in the meantime.

Non-forfeiture of 91.

(1) An industrial life assurance policy on which less than one industrial policies years premiums have been paid shall not be forfeited by reason only in certain cases of of the non-payment of any premium unless the premium has remained non-payment of unpaid for not less than four weeks after it became due.

premiums.

(2) An industrial life assurance policy on which not less than one years premiums have been paid shall not be forfeited by reason only of the non-payment of any premium unless the premium has remained unpaid for not less than eight weeks after it became due.

(3) An industrial life assurance policy on which not less than two years premiums have been paid shall not be forfeited by reason only of the non-payment of any premium, unless the premium has remained unpaid for not less than twelve weeks after it became due.

(4) In the event of an industrial life assurance policy on which not less than three years premiums have been paid being forfeited by reason of non-payment of any premium, the insurer shall, without requiring any application from the policy holder, grant a paid-up policy for an amount not less than that calculated in accordance with the rules.

(5) The paid-up policy shall be payable upon the happening of the contingency upon which the amount insured under the original policy would have been payable.

Treatment of debts 92.

Where in pursuance of any provision in this Part a policy on grant of paid up holder is entitled to receive, or an insurer is required to grant, a paid-up policies.

policy and there is any debt owing to the insurer under or secured by the policy, the insurer may elect Rev.

2012] Insurance CAP.

487 91 (a) to treat the debt so owing as a debt secured by the paid-up policy and thereupon the paid-up policy shall be a security for the debt so owing; or (b) in the ascertainment of the amount of the paid-up policy, to reduce the amount by taking into account, upon a basis approved by the Commissioner, the debt so owing to the insurer, and thereupon the debt shall cease to be owing to the insurer.

93.

(1) The provisions of sections 88 to 92 (inclusive) shall not Certain policies apply to exempted from operation of sections (a) an instrument securing the grant of an annuity for a term 88 to 92.

dependent upon human life, not being a deferred annuity during the period of deferment; or (b) a policy which provides insurance against contingencies none of which may happen, not being a policy which provides for the payment of a sum of money if the life insured by the policy survives a specied period.

(1A) Every insurer who provides annuities and other insurance investment products shall publish information regarding such annuities and other products on quarterly basis in the manner specied by the Commissioner.

(2) Subject to subsection (1), the Minister may, on the recommendation of the Commissioner, by notice in the Gazette, declare that the provisions of sections 88 to 92 shall apply in respect of any policy or class of policies with such modications as are declared in the notice, and those provisions shall apply in respect of that policy or class of policies accordingly.

94.

(1) Subject to this Act, no policy of insurance shall be issued Insurable interest on the life or lives of any person or persons, or on any other event or essential for all policies.

events whatsoever, wherein the person or persons for whose use, benet, or on whose account such policy or policies shall be made, shall have no insurable interest.

(2) An insurable interest shall be deemed to be had by (a) a parent of a child under eighteen years of age, or a person in loco parentis of such a child, in the life of the child to the extent of funeral expenses which may be incurred by him on the death of the child; CAP92.

487 Insurance [Rev.

2012 (b) a husband, in the life of his wife; (c) a wife, in the life of her husband; (d) any person, in the life of another upon whom he is wholly or in part dependent for support or education; (e) a corporation or other person, in the life of an ofcer or employee thereof; and (f) a person who has a pecuniary interest in the duration of the life of another person, in the life of that person.

(3) A childs advancement policy effected either before, on, or after the appointed date shall not be void by reason only that the person effecting the policy had not at the time the policy was effected an insurable interest in the life of the child.

Property in childs advancement policy.

95.

(1) The provisions of this section shall apply to every childs advancement policy, whether effected before, on, or after the appointed date.

(2) Where a child whose life is insured under a childs advancement policy has, whether before, on, or after the appointed date, attained the vesting age, the policy shall be deemed to have been, or, as the case may be, shall become, as on and after the date on which the child attained the vesting age, the absolute property of the child both at law and in equity, subject (a) to any debt owing to the insurer under, or secured by, the policy; (b) to any dealing done, prior to the attainment by the child of the vesting age, by the owner of the policy; and (c) to any dealing done, after the attainment by the child of the vesting age and prior to the appointed date, by the owner of the policy.

(3) On the death or bankruptcy, during the childs lifetime and before he attains the vesting age, of the person effecting the policy, the executors, administrators, ofcial receiver or trustee in bankruptcy of the person effecting the policy as the case may be (in this subsection referred to as the representative) shall, subject to any dealings other than testamentary by the person effecting the policy before his death or bankruptcy, hold the policy in trust for the child until he attains the vesting age, or dies before attaining the vesting age, and the representative may assign, mortgage, charge, surrender, vary or Rev.

2012] Insurance CAP.

487 93 otherwise deal with the policy and apply the proceeds as he thinks t for the maintenance or benet of the child and the upkeep of the policy, and the insurer issuing the policy shall be under no obligation to see to the application of the proceeds.

(4) Nothing in this section shall invalidate a payment made before the appointed date in respect of a childs advancement policy if the payment, but for this Act, would have been valid.

96.

(1) An insurer shall not, by a policy effected on the life of a Limitation of amount child, contract to pay on the death of the child under ten years of age payable on death of a sum of money (apart from repayment of premiums) which, added to child.

any amount payable (apart from repayment of premiums) on the death 9 of 2000, s.

91.

of the child under ten years of age by any other insurer, exceeds one hundred thousand shillings.

(2) In a policy to which subsection (1) refers there shall be clearly set out that the total sum recoverable as insurance moneys or other benets from any one or more insurers (apart from repayment of premiums) shall not exceed one thousand shillings.

97.

An insurer shall not pay any sum (apart from repayment Production of of premiums) on the death of a child under ten years of age except prescribed certicate of death.

upon production of a certicate of death issued in accordance with the Cap.

149.

provision of the Births and Deaths Registration Act.

98.

Sections 96 and 97 shall not apply to a policy on the life of a Saving as to child when the person effecting the insurance has an insurable interest, insurable interest.

apart from the mere interest under section 94 (2) (a), in the life of the child.

99.

(1) Subject to any written law relating to bankruptcy, the Protection of property and interest of a person in a policy effected (whether before, insureds interests.

on, or after the appointed date) upon his own life shall not be liable to be applied or made available in payment of his debts by a judgment, order or process of any court.

(2) In the event of a person whose life is insured dying after the appointed date, the moneys payable upon his death under or in respect of a policy effected upon his life shall not, subject to any written law relating to bankruptcy, be liable to be applied or made available in payment of his debts by a judgment, order or process of any court, or by retainer by an executor or administrator, or in any other manner, except by virtue of a contract or charge made by the person whose life is insured or by virtue of an express direction contained in his will or other testamentary instrument executed by him that the moneys arising from the policy shall be so applied.

CAP94.

487 Insurance [Rev.

2012 (3) A direction to pay debts, or a charge of debts upon the whole or any part of the testators estate, or a trust for the payment of debts, shall not be deemed to be such an express direction.

Family insurance 100.

(1) Subject to any written law relating to bankruptcy, a policies.

policy effected (whether before, on, or after the appointed date) by a man upon his own life, and expressed to be for the benet of his wife, or of his children, or of his wife and children, or any of them, or by a woman upon her own life and expressed to be for the benet of her husband or of her children, or of her husband and children, or any of them, shall create a trust in favour of the objects named in the policy, and the moneys payable under that policy shall not, so long as any object of the trust remains unperformed, form part of the estate of the person whose life is insured, or be subject to his or her debts.

(2) The person whose life is assured may, by the policy, or by a memorandum under his or her hand, appoint trustees of the moneys payable under the policy, and from time to time appoint new trustees of the moneys and may make provision for the appointment of new trustees of the moneys, and for the investment of the moneys payable under the policy.

(3) Subject to subsection (4), if at any time there is no trustee, the policy shall vest in the person whose life is assured, and his personal representatives, in trust for the purposes referred to in, and subject to, subsection (1).

(4) If at any time there is no trustee and the policy is not vested in any person in pursuance of subsection (3) and it is expedient to appoint trustees or new trustees, trustees or new trustees may be appointed by the court.

(5) The receipt of a trustee, or if there is no trustee or in default of notice to the insurer of the existence of a trustee, the receipt of the person whose life is insured or of his personal representative, or, if the policy has been assigned in pursuance of the power to borrow money conferred by subsection (6), the receipt of the owner for the time being of the policy, shall be a discharge to the insurer for the sum payable under the policy, or for the value of the policy, in whole or in part.

(6) A trustee, or if there is no trustee or in default of notice to the insurer of the existence of a trustee, the person whose life is insured or his personal representative, may vary the terms of the policy in any manner permitted by the insurer, surrender the policy in whole or in part or borrow money upon the policy, and any money obtained by any such variation, surrender or borrowing shall be subject to the same trusts as Rev.

2012] Insurance CAP.

487 95 those upon which the policy was or is held.

(7) Except as expressly provided by this section, nothing in this section shall affect the operation of the law in force in Kenya relating to trustees.

(8) In this section, children in relation to a person, includes (a) a person adopted by the rst-mentioned person under the law of Kenya relating to the adoption of children; or (b) a person adopted by the rst-mentioned person under the law of any country relating to the adoption of children if the validity of the adoption would be recognized under the law of Kenya: or (c) a step-child of that person.

Probate or 101.

(1) Where administration may be dispensed with in (a) there is only one policy under which moneys are payable certain cases.

by a particular insurer to the personal representative of a9 of 2000, s.

92.

deceased person and those moneys do not, excluding bonus additions, exceed one hundred thousand shillings; or (b) there are two or more policies under which moneys are so payable and the aggregate of those moneys does not, excluding bonus additions, exceed ve thousand shillings, the insurer may, without requiring the production of any probate or letters of administration, pay the moneys, together with the bonuses (if any) which have been added to the policy or policies, to a person (i) who is the husband, wife, father, mother, child, brother, sister, nephew or niece of the deceased person; or (ii) who satises the insurer that he is entitled to the property of the deceased person under his will or under the law relating to the disposition of the property of the deceased person or that he is entitled to obtain probate of the will of the deceased person or to take out letters of adminis- tration of his estate.

(2) The insurer making any such payment shall be thereby discharged from all further liability in respect of the moneys payable under the policy or policies.

CAP96.

487 Insurance [Rev.

2012 Death of owner of 102.

(1) Subject to this section, where the owner of a policy of policy not being life life assurance, not being the person whose life is assured by the policy, insured.

predeceases the person whose life is so assured, and a person satises the insurer that issued the policy that he is entitled (a) under the will or on the intestacy of the deceased owner to the benet of the policy; or (b) to obtain probate of the will, or to take out letters of administration of the state of the deceased owner, the insurer may, without requiring the production of probate or letters of administration, endorse on the policy a declaration that that person has so satised the insurer and is the owner of the policy, and thereupon that person shall become, subject to subsection (2), the owner of the policy.

(2) Subsection (1) shall not confer on a person declared to be the owner of a policy any benecial interest in the policy which he would not otherwise have had.

(3) This section shall apply in relation to a policy referred to in subsection (1) ether the deceased owner died before, on, or after the appointed date.

(4) This section shall not apply in relation to (a) a policy the surrender value of which, at the date of the death of the deceased owner, exceeds or exceeded two thousand ve hundred shillings; or (b) a policy which is one of two or more policies owned by the deceased owner and issued by the same insurer if the aggregate of the surrender values of those policies at the date of the death of the deceased owner exceeds or exceeded two thousand ve hundred shillings.

(5) For the purposes of subsection (4), the surrender value of a policy is the amount (including any amount in respect of bonus additions) that would be paid by the insurer issuing the policy upon its surrender.

Insurer not bound to 103.

An insurer shall not in any circumstances be bound or see to application of concerned to see to the application of any moneys paid by payments, payments.

the insurer in respect of any policy.

Power to pay into 104.

(1) An insurer may, subject to any rules of court in that Rev.

2012] Insurance CAP.

487 97 behalf, pay into court any moneys payable by the insurer in respect of court.

a policy for which, in the opinion of the insurer, no sufcient discharge can otherwise be obtained.

(2) The receipt of a registrar of the court for the moneys shall be a good and valid discharge to the insurer for moneys so paid in, and the moneys shall, subject to the rules of the court, be dealt with according to the order of the court.

105.

Where a claim arising under a policy is paid, no deductions No deductions in shall, except with the consent in writing of the claimant, be made respect of other on account of premiums or debts due to the insurer under any other policies.

policy.

106.

(1) Where an insured person claims that the policy (in this Lost policies.

section referred to as the original policy) is lost or has been destroyed, 9 of 2000, s.

93.

the insurer liable under the original policy may, subject to this section, upon application by that person and upon such evidence as to the loss or destruction of the original policy as the insurer deems sufcient, issue to the applicant a special policy in substitution for the original policy.

(2) A special policy shall (a) be a copy, as nearly as can be ascertained, of the original policy in substitution for which it has been issued; (b) contain copies of every endorsement on the original policy registered by the insurer; and (c) state the reason for the issue of the special policy.

(3) Before issuing a special policy the insurer shall, if the amount insured, exclusive of bonus additions in the case of a policy of long term insurance, exceeds one hundred thousand shillings, give at least one months notice of his intention so to do in the Gazette and in at least one newspaper published and circulating in Kenya.

(4) The expenses of advertisement and all other costs of the issue of a special policy shall be paid by the applicant at the time of application.

(5) The fact of the issue of a special policy and the reason for its issue shall be recorded by the insurer in the register of policies.

(6) A special policy shall be valid and available for all purposes for which the original policy in substitution for which it has been issued would have been valid and available and, after the issue of the special CAP98.

487 Insurance [Rev.

2012 policy, the original policy in substitution for which it has been issued shall be void.

(7) If the insurer fails to issue a special policy within six months of an application in writing from the insured person, the Commissioner may, upon application and upon such evidence as to the loss or destruction of the original policy as the Commissioner deems sufcient, order the insurer, upon such terms and within such time as the Commissioner thinks t, to issue a special policy.

Part IxassIgnments, mortgages and nomInatIons Assignments of 107.

(1) Subject to section 110, an assignment of a policy of life policies.

assurance made after the appointed date (a) shall be by memorandum of transfer and shall be (i) endorsed upon the policy, or upon an annexure to the policy that is referred to in, or in an endorsement on, the policy; and (ii) signed by the transferor in the presence of a witness; and (b) shall not be recognized by or binding on the insurer until registered in accordance with this section by the insurer liable under the policy.

(2) Every assignment shall be registered in a register to be provided by the insurer for that purpose, and the date of registration shall be inserted in the memorandum of transfer, which shall also be signed by the principal ofcer of the insurer or a person thereto authorized by him in writing.

(3) The transferee under a duly registered assignment shall have all the powers and be subject to all the liabilities of the transferor under the policy, and may sue in his own name on the policy: Provided that nothing in this section shall be construed to admit the transferee to membership of an insurer or to deprive the transferor of his membership in respect of a policy, except as provided in the instruments constituting the insurer or in his articles of association or other rules.

(4) The receipt of the transferee shall be a discharge to the insurer for all moneys paid by the insurer under the policy.

Rev.

2012] Insurance CAP.

487 99 (5) Every memorandum of transfer shall, as between the insurer and any person claiming any moneys under the policy, be conclusive evidence for all purposes that the transferee was at the time of registration the absolute owner of the policy free from all trusts, rights, equities and interests (except liens or charges which the insurer has upon the policy), and legally entitled to receive and give a discharge for those moneys.

(6) Any discharge or surrender of or security over the policy given to the insurer by the transferee shall be valid and effectual, notwithstanding the existence of any trust, right, equity or interest of any other person.

(7) The insurer taking the discharge, surrender or security shall not be required or concerned to inquire or ascertain the circumstances in which or the consideration for which the transferee or any previous transferee became a transferee, or, except as provided by section 108, be affected by express, implied or constructive notice of any trust, right, equity or interest.

(8) This section shall not (a) impose on a minor any liability to which he would not, but for this section, be subject; (b) confer on a minor any power or capacity which, but for this section, he would not have; or (c) validate a receipt or discharge or a surrender of, or security over, a policy given by a minor, if, but for this section, that receipt, discharge, surrender or security would not be valid.

108.

(1) Notwithstanding anything contained in section 107, an Effect of notice of insurer shall not be entitled to any protection under that section or to rely trust.

upon any of the provisions of that section if the insurer has not acted in good faith or has received express notice in writing of any trust, right, equity or interest of any person.

(2) In case of the receipt of any such notice the insurer may pay into the court any moneys payable under the policy, and the receipt of a registrar of the court for the moneys shall be a good and valid discharge to the insurer for the moneys so paid in.

(3) The moneys shall be paid out to such person as the court orders.

CAP100.

487 Insurance [Rev.

2012 Assignment of policy 109.

The rights and liabilities arising under a policy shall not to insurer issuing it be deemed, either at law or in equity, to be merged or extinguished by not to merge rights, reason only of an assignment of the policy, whether at law or in equity, etc., under policy.

to the insurer that issued the policy.

Nomination of policy 110.

Where an insurer is satised that holder.

(a) a policy has been issued or transferred to, or the ownership of a policy is otherwise vested in, persons as trustees; and (b) those persons are no longer the trustees for the purposes of the trust, the insurer may, at the request in writing of the persons claiming to be the trustees for the time being for the purposes of the trust and on the evidence of a statutory declaration by one of those persons verifying the claim, record the names of those persons as the owners of the policy, and thereupon those persons shall become the owners of the policy.

Policies held by 111.

(1) The holder of a policy of life assurance on his own life trustees.

may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death: Provided that, where the nominee is a minor, the policyholder may appoint, in the manner prescribed, any person to receive the money secured by the policy in the event of his death during the minority of the nominee.

(2) Any nomination under subsection (1), in order to be effectual, shall either be incorporated in the text of the policy itself or be made by endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy, and the nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement or a further endorsement or a will, as the case may be, but unless notice in writing of any such cancellation or change has been delivered to the insurer, the insurer shall not be liable for any payment under the policy made bona de by him to a nominee mentioned in the text of the policy or registered in the books of the insurer.

(3) The insurer shall furnish to the policy holder a written acknowledgement of having registered a nomination or a cancellation or change thereof, and may charge the prescribed fee not exceeding ten shillings, for registering a nomination, or its cancellation or change.

(4) A transfer or assignment of a policy made in accordance with this Act shall automatically cancel a nomination: Rev.

2012] Insurance CAP.

487 101 Provided that the assignment of a policy to the insurer who bears the risk on the policy at the time of assignment, in consideration of a loan granted by the insurer on the security of the policy within its surrender value, or its reassignment on repayment of the loan, shall not cancel a nomination but shall affect the rights of the nominee only to the extent of the insurers interest in the policy.

(5) Where the policy matures for payment during the life-time of the person whose life is insured, or where the nominee dies, or if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the policy holder or his heirs or legal representatives or the holder of a succession certicate, as the case may be.

(6) Where the nominee survives, or if there are more nominees than one, one or more nominees survive the person whose life is insured, the amount secured by the policy shall be payable to the survivor or survivors, as the case may be.

(7) The provisions of this section shall not apply to a policy to which section 100 (1) applies.

Part xClaIms on small lIfe PolICIes 112.

(1) In the event of a dispute relating to the settlement of a Claims on small life claim on a policy of life assurance assuring a sum not exceeding one policies.

9 of 2000, s.

94.

hundred thousand shillings (exclusive of any prot or bonus not being a guaranteed prot or bonus) issued by an insurer in respect of life assurance business transacted in Kenya, arising between a claimant under the policy and the insurer who issued the policy or has otherwise assumed liability in respect thereof, the dispute may at the option of the claimant be referred to the Commissioner for decision, and the Commissioner may, after giving an opportunity to the parties to be heard and after making such further enquiries as he may think t, decide the matter.

(2) The decision of the Commissioner under this section shall be nal and shall not be called in question in any court, and may be executed by the court which would have been competent to decide the dispute if it had not been referred to the Commissioner as if it were a decree passed by that court.

(3) There shall be charged and collected in respect of an adjudication under this section such fees whether by way of percentage or otherwise as may be prescribed.

CAP102.

487 Insurance [Rev.

2012 Part xItransfers and amalgamatIons Application to 113.

(1) Subject to this Act, where amalgamate or (a) two or more insurers, at least one of whom is registered transfer.

under this Act, intend to amalgamate; or 12 of 1987, s.

5, 12 of 1994, s.

24, 4 of 2012, s.

35.

(b) an insurer intends to transfer insurance business of any class to another insurer and at least one of those insurers is registered under this Act, both the insurers jointly in the former case, and the transferor in the latter case, shall apply to the Authority for his approval of the amalgamation or transfer, as the case may be: (2) An application to amalgamate or transfer insurance business shall be accompanied by (a) the draft of the document under which the proposed amalgamation or transfer is to take effect; (b) audited accounts and balance sheets of both insurers as on the date of the proposed amalgamation or transfer; (c) any other report or document on which the proposed amalgamation or transfer is founded or prepared as at the date of the proposed amalgamation or transfer, as the case may be; (d) actuarial reports and abstract in respect of long-term insurance business of both the insurers, such reports and abstracts of the transferor, prepared in conformity with the provisions of section 115, as read with the requirements described in the regulations as at the date of the proposed amalgamation or transfer, as the case may be.

(3) Where the proposed amalgamation or transfer is in respect of long term insurance business, an application under this section shall, in addition to the documents mentioned in subsection (2), be accompanied by a report on the terms of the scheme and likely effects of the scheme on policy holders of the insurers concerned as a result of the proposed scheme of amalgamation or transfer, prepared by an actuary who has not been professionally connected with any of the insurers at any Rev.

2012] Insurance CAP.

487 103 time during the ve years immediately preceding the application and prepared as at the date of the proposed amalgamation or transfer, as the case may be.

(4) The audited accounts and balance sheets, reports and abstracts referred to in subsections (2) and (3) shall be prepared as at the date at which the amalgamation or transfer is intended to be effected or prepared as at the date of the proposed amalgamation or transfer, as the case may be; which date shall not be more than twelve months before the date of the application.

114.

(1) The Authority shall not determine an application under Notice.

this Part unless 12 of 1987, s.

11, 4 of 2012, s.

36.

(a) notice of the intention to apply for amalgamation or transfer, approved by the Authority for the purpose, has been published in the Gazette and in at least two newspapers published and circulating in Kenya; (b) except in so far as he has otherwise directed, a copy of the notice has been sent to every affected policy holder and every other person who claims an interesting a policy included in the amalgamation or transfer and has given written notice of his claim to one of the insurers involved in the amalgamation or to the transferor, as the case may be; and (c) copies of a statement setting out particulars of the amalgamation or transfer, including in the case of long term insurance business the report of the actuary, and approved by the Authority, have been available for inspection at one or more places in Kenya for a period of not less than thirty days beginning, with the date of the rst publication of the notice in accordance with paragraph (a).

(2) The notice referred to in subsection (1) shall invite any person (including an employee, director, shareholder or policy holder) who has reasonable grounds for believing that he would be adversely affected by the carrying out of the scheme to write or make oral representations to the Authority within thirty days of the publication of the notice, stating the grounds on which he believes he would be adversely affected by the carrying out of the scheme of amalgamation or transfer.

115.

(1) The Authority shall not determine an application under Conditions for this Part which involves or includes a transfer of long term insurance approval in relation business, unless the scheme involves a transfer of assets relating to the to long term insurance business.

long term insurance business proposed to be transferred in accordance 12 of 1987, s.

11, nd with the provisions of this section.

20 of 1989, 2 Sch.

CAP104.

487 Insurance [Rev.

2012 12 of 1994, s.

25, 4 of 2012, s.37.

(2) If the transfer covers all the long term insurance business of the transferor, all the assets representing the statutory fund maintained by the transferor shall, subject to subsection (4), be transferred.

(3) If the transfer applies to a part only of the long term insurance business of the transferor, the approved proportion of the assets representing the statutory fund maintained by the transferor shall, subject to subsection (4), be transferred.

(4) For the purposes of subsections (2) and (3 (a) subject to paragraphs (b) and (c) of this subsection, assets of not less than the actuarial value of the liabilities on all the policies, after making adequate provision for maintenance of bonuses at current levels, and for the reasonable expectations of policy holders, liabilities being calculated on a proper basis, shall be transferred; (b) where the total assets available in terms of subsection (2) or (3) are less in value than the gure arrived at under paragraph (a) of this subsection, the whole of the assets so available shall be transferred, and the Authority shall decide, after taking into account the relevant actuarial considerations, whether any other assets of the insurer shall also be transferred and whether any provision for reduction of contracts shall be made in the scheme of transfer; (c) where the total assets available in terms of subsection (2) or (3) exceed the gure arrived at under paragraph (a) of this subsection, the assets transferred shall be of value equal to the gure arrived at under paragraph (a) plus the following proportions of the excess of the assets in terms of subsection (2) or (3) over the gure arrived at under paragraph (a) namely (i) if the excess is equal to or less than forty per cent of the gure arrived at under paragraph (a), ninety per cent of such excess; and (ii) if the excess is more than forty per cent of the gure arrived at under paragraph (a), ninety per cent of the portion of the excess amounting to forty per cent of the gure arrived at under paragraph (a) plus fty per cent of the balance of the excess; except that where the transferor does not have a share capital, the entire excess of the assets in terms of subsec- Rev.

2012] Insurance CAP.

487 105 tion (2) or (3) over the gure arrived at under paragraph (a) shall be transferred in addition to the assets of value equal to the gure arrived at under paragraph (a).

(5) For the purposes of subsections (2) and (3), the total assets shall include all assets held by the insurer in Kenya which are applicable to, or were built out of, all the long term insurance business carried on in the past irrespective of whether they are shown against long term insurance business and irrespective of whether the business was carried on in the past solely in Kenya or elsewhere.

(6) In determining the value of the assets due provision should be made for any possible tax liabilities arising on account of the value placed on the assets or on account of the transfer of the assets.

(7) In this section proper basis means the minimum basis prescribed or the basis applicable in the case of a bonus reserve valuation, allowing provision for the maintenance of bonuses at current levels and for the reasonable expectations of policy-holders in that context, or the basis adopted at the latest preceding valuation, whichever brings out the highest gure of liability.

approved proportion means the proportion which is approved by the Authority as reasonable in the circumstances of the case.

116.

The Authority shall not approve an amalgamation or transfer Further conditions on an application under section 113 unless he is satisfied that for approval.

12 of 1987, s.

11, (a) every policy included in the amalgamation or transfer 4 of 2012, s.38.

evidences a contract which (i) was entered into before the date of the application; and (ii) imposes on the insurer obligations the performance of which will constitute the carrying on of insurance busi- ness in Kenya; and (b) the amalgamated insurer or transferee, as the case may be, is, or immediately after the approval will be, authorized under this Act to carry on in Kenya insurance business of the appropriate class or classes, and unless in his opinion the amalgamated insurers or transferees nancial resources and the other circumstances of the case justify the giving of his approval.

CAP106.

487 Insurance [Rev.

2012 Approval or refusal.

117.

(1) The Authority may, after considering the documents and 12 of 1987, s.

11, reports deposited with him under this Part and the representations, if any, 4 of 2012, s.

39.

made under section 114 (2), subject to such terms and conditions as he considers necessary, approve the scheme of amalgamation or transfer.

(2) On determining an application made under subsection (1) the Authority shall (a) publish a notice of his decision in the Gazette and in such other manner as he thinks t; and (b) send a copy of that notice to the parties to the amalgamation or the transferor and the transferee and every person who made representations in accordance with the notice referred to in section 114, and if he refuses the application he shall inform the parties to the amalgamation or the transferor and the transferee in writing of the reasons for his refusal.

Effect of approval 118.

(1) Subject to subsection (2), an instrument giving effect to under section 117.

an amalgamation or transfer approved by the Authority under section 12 of 1987, s.

11, 117 shall be effectual in law 4 of 2012, s.

40.

(a) to transfer to the amalgamated insurer or the transferee all the transferors rights and obligations under the policies included in the instruments; and (b) if the instrument so provides, to secure the continuation by or against the amalgamated insurer or the transferee of any legal proceedings by or against either party to the amalgamation or against the transferor which relate to those rights or obligations, notwithstanding the absence of any agreement or consent which would otherwise be necessary for it to be effectual in law for those purposes.

(2) Except in so far as the Authority may otherwise direct, a policy holder whose policy is included in such an instrument shall not be bound by it unless he has been given written notice of its execution by either of the insurers involved in the amalgamation or transfer.

(3) Where an amalgamation or transfer has been approved, the amalgamated insurer or the transferee insurer shall within ten days from the date of completion of the amalgamation or transfer deposit with the Rev.

2012] Insurance CAP.

487 107 Authority certied copies of (a) statements of his respective assets and liabilities; and (b) the documents under which the amalgamation or transfer was effected.

Part xIIInsolVenCy and wIndIng uP 119.

In this Part insurer means an insurer carrying on insurance Insurer dened for business in Kenya.

this Part.

120.

Notwithstanding anything to the contrary in the Companies Voluntary liquidation.

Act, an insurer carrying on long term business shall not be wound up Cap.

486.

voluntarily.

121.

Where a petition for the winding up of an insurer is presented Winding up by court.

by a person other than the Commissioner, a copy of the petition shall be served on the Commissioner and the Commissioner shall be entitled to be heard on the petition.

122.

For the purpose of section 219 of the Companies Act, an Insolvency.

insurer shall be deemed to be unable to pay his debts if at any time the requirements of section 41 (which relate to margins of solvency) are not observed by the insurer.

123.

(1) The Commissioner may, with the prior approval of the Petitions for winding up.

Board, unless the insurer is already being wound up by the court, present 12 of 1987, s.

6, an application to the court for winding up the insurer in accordance 11 of 2006, s.

15.

with the Companies Act under any of the following circumstances- (a) in terms of section 19 (5) or 67 (3) of this Act; (b) in the case of an insurer carrying on long term insurance business as a closed fund within the meaning of that term in section 21, on the grounds that the business has continued as a closed fund for a period of more than ve years (excluding any period before the appointed date), that the insurer has failed to implement a scheme approved or framed by the Commissioner under section 10, and that the continuance of the insurer without winding up is detrimental to the interests of the policy holders; (c) on the ground that the insurer is unable to pay his debts within the meaning of section 219 of the Companies Act; (d) on the ground that the insurer, having failed to comply with CAP108.

487 Insurance [Rev.

2012 any requirement of this Act, has continued that failure, or having contravened any provision of this Act, has continued that contravention for a period of six months after notice of failure or contravention has been given to the insurer by the Commissioner; (e) on the ground that the insurer is unable to full the reasonable expectations of policy holders or potential policy holders; (f) on the ground that it is just and equitable in the interests of the policy holders that the insurer should be wound up; (g) on the ground that the insurer has failed to pay tax that is due and outstanding.

(2) The court may, after considering the petition presented by the Commissioner, order the winding up of the insurer if it is of the opinion that there are sufcient grounds and it is just and equitable for the insurer to be wound up.

Secondary 124.

(1) Where the insurance business or any part of the insurance companies.

business of an insurer has been transferred to an insurer to which this Act applies under an arrangement in pursuance of which the rst-mentioned insurer (in this section called the secondary company) or the creditors thereof has or have claims against the insurer to which the transfer was made (in this section called the principal company) then, if the principal company is being wound up by or under the supervision of the court, the court shall, subject to the provisions of this section, order the secondary company to be wound up in conjunction with the principal company and may by the same or any subsequent order appoint the same person to be liquidator for the two insurers and make provision for such other matters as may seem to the court necessary, with a view to the insurers being wound up as if they were one insurer.

(2) The commencement of the winding up of the principal company shall, except as otherwise ordered by the court, be the commencement of the winding up of the secondary company.

(3) In adjusting the rights and liabilities of the members of the several insurers between themselves, the court shall have regard to the constitution of the insurers, and to the arrangements entered into between the insurers in the same manner as the court has regard to the rights and liabilities of different classes of contributories in the case of the winding up of a single insurer or as near thereto as circumstances admit.

(4) Where an insurer alleged to be the secondary company is not in process of being wound up at the same time as the principal company Rev.

2012] Insurance CAP.

487 109 to which the insurer is secondary, the court shall not direct the secondary company to be wound up unless, after hearing any objections that may be urged by or on behalf of the insurer against being wound up, the court is of the opinion that the insurer is secondary to the principal company and that the winding up of the insurer in conjunction with the principal company is just and equitable.

(5) An application may be made in relation to the winding up of a secondary company in conjunction with a principal company by any creditor of, or person interested in, the principal or secondary company.

(6) Where an insurer stands in the relation of a principal company to one insurer, and in the relation of a secondary company to another insurer, or where there are several insurers standing in the relation of secondary companies to one principal company, the court may deal with any number of such companies together or in separate groups, as it thinks most expedient, upon the principles laid down in this section.

125.

(1) Where an insurer is a subsidiary of a company which is Insurers being not an insurer, and the latter company is wound up under the Companies subsidiaries of Act or otherwise non-insurers.

(a) the subsidiary shall not be wound up except on the basis of a separate application for winding up; and (b) where the subsidiary carries on long term insurance business, whether with or without other classes of insurance business, and is ordered to be wound up, all the admitted assets of the statutory funds together with any other assets of the subsidiary which have been included in a separate balance sheet relating to the long term insurance business, and together also with any assets which, though not shown against the statutory funds or in that balance sheet, should in the opinion of the court be equitably related to the long term policy holders, shall be treated as exclusively reserved for the benet of the policy holders of long term insurance business, and those assets shall not be utilized directly or indirectly for any purpose other than for the benet of the long term insurance policy holders as long as those policy holders have not been fully discharged or otherwise provided for.

126.

(1) In any proceedings upon a petition to wind up an insurer Supplemental presented by the Commissioner under section 123 (1), evidence that the provisions as to insurer was insolvent at the close of the period to which the accounts winding up.

and balance sheet of the insurer last deposited under section 61 relate, or at any date as at which an investigation was last made under section CAP11 0.

487 Insurance [Rev.

2012 57 or 58, shall be evidence that the insurer continues to be unable to pay his debts, unless the contrary is proved.

(2) Rules made under section 344 of the Companies Act may regulate the procedure and the practice to be followed in proceedings with respect to the winding up of insurers under this Act.

Valuation of assets 127.

(1) Subject to any directions which may be given by the and liabilities.

court (a) the value of the assets and liabilities shall be ascertained in such manner and upon such basis as the liquidator thinks t; (b) the liabilities of an insurer in respect of the current policies of long term insurance business shall, as far as practicable, be calculated by the method and upon the basis to be determined by an actuary appointed by the court; (c) the liabilities of an insurer in respect of current policies of general insurance business shall, as far as practicable, be such portion of the last premium paid as is proportionate to the unexpired portion of the policy in respect of which the premium was paid.

(2) The actuary appointed under subsection (1) shall, in the determination of liabilities, take into account any special directions which may be given to him by the court.

Continuation of 128.

(1) The liquidator shall, so far as it may be possible and unless business of insurer in the court otherwise orders, carry on the insurance business of an insurer liquidation.

with a view to it being transferred as a going concern to another insurer, whether an existing company or a company formed for the purpose; and, in carrying on that business, the liquidator may agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance.

(2) If the liquidator is satised that the interests of the creditors in respect of liabilities of the insurer attributable to his business require the appointment of a special manager of the business, he may apply to the court, and the court may on the application appoint a special manager of that business to act during such time as the court may direct, with such powers, including any of the powers of a receiver or manager, as Rev.

2012] Insurance CAP.

487 111 may be entrusted to him by the court.

(3) The court may require the special manager to give such security as it considers necessary.

(4) The court may make such order as it considers appropriate with regard to the payment of remuneration to the special manager.

(5) The court may, subject to such conditions (if any) as it may determine, reduce the amount of the contracts made by an insurer in the course of carrying on his business as an alternative to winding up or otherwise.

Part xIII (s.

129 - 144 Repealed by 7 of 1997, s.

15).

Part xIVmandatory reInsuranCe CessIons Certain business 145.

(1) Subject to this Act, every insurer shall reinsure with to be ceded to the Kenya Reinsurance Corporation Limited such proportion of each Kenya Reinsurance policy of insurance issued or renewed in Kenya by the insurer, in such Corporation.

proportion and in such manner and subject to such terms and conditions 7 of 1997, s.

16.

as are prescribed.

(2) Subject to this Act, every insurer shall also place with the Company, in addition to the reinsurance specied under subsection (1), such proportion of its reinsurance business from Kenya placed in the international reinsurance market, excluding facultative reinsurance, in such proportion and in such manner and subject to such terms and conditions as are prescribed.

146.

(1) The Company may refuse to accept any reinsurance Power to decline offered pursuant to this Part, and in that case the Company shall furnish business.

the insurer concerned, if so requested, the reasons for its refusal.

7 of 1997, s.

17.

(2) An insurer may, within fourteen days after receiving reasons for refusal under this section, appeal to the Tribunal against the refusal, and thereupon the Tribunal may conrm the refusal or may direct the Company to accept the reinsurance concerned, and any decision of the Tribunal on an appeal shall be nal and conclusive.

(3) Where reinsurance is refused under this section any liability of the insurer under this Part in respect of that reinsurance shall cease.

147.

Payment by insurers to the Company in respect of reinsurance Payment.

effected under this Part shall be made within such period as the Minister 5 of 1998, s.

55.

may, by notice in the Gazette, prescribe.

CAP11 2.

487 Insurance [Rev.

2012 Returns and 148.

An insurer required to effect reinsurance under this Part information.

shall produce or submit to the Company all returns, statements, books, 7 of 1997, s.

18.

records, accounts or other documents, or true copies thereof, and shall furnish any information, which may be required by the Company for the purposes of this Part.

Offences and penalty.

149.

An insurer who 7 of 1997, s.

19.

(a) fails to effect reinsurance or make any payment as, and in such manner as, is required by or under this Part; (b) fails to comply with a requirement of the Company under section 148 within a reasonable time after the making thereof; or (c) furnishes information which is false in whole or in part, or produces or submits as true and correct any document or copy thereof which is not true and correct, in purported compliance with any such requirement, shall be guilty of an offence and liable to a ne.

9 of 2007, s.

60.

Part xVIntermedIarIes, rIsK managers, motor assessors, InsuranCe InVestIgator, loss adjusters, InsuranCe surVeyors, medICal InsuranCe ProVIder and ClaIms settlIng agents Only registered 150.

(1) No person shall, after the expiry of three months from the brokers, agents, risk appointed date, commence, transact or carry on in Kenya the business of managers, motor a broker, agent, risk manager, motor assessor, insurance investigator, loss assessors, insurance adjuster, insurance surveyor, medical insurance provider or claims investigator, loss settling agent unless he is registered under this Act.

adjusters, surveyors, medical insurance provider and claims (2) No person shall, after the expiry of three months from the settling agents to appointed date, use the name of broker, agent, risk manager, motor carry on business.

assessor, insurance investigator, loss adjuster, insurance surveyor, 9 of 2003, s.

13, medical insurance provider or claims settling agent in a manner to give 9 of 2007, s.

60.

the impression that he is registered to commence, transact or carry on any such business, unless he is so registered.

(3) Nothing in this Act shall prohibit or otherwise render unlawful the continuance of the business of a risk manager, motor assessor, insurance investigator, loss adjuster, insurance surveyor, medical insurance provider or claims settling agent in Kenya in so far as it is necessary to complete any assignment which was undertaken before the appointed date.

(4) A person who contravenes the provisions of subsection (1) Rev.

2012] Insurance CAP.

487 113 shall be guilty of an offence and liable to a ne not exceeding fty thousand shillings and, if the offence is a continuing one, to a further ne not exceeding one thousand shillings for every day during which the offence continues.

150A.

(1)Every person engaged in the business of placing medical Registration of insurance business with an insurer in expectation of payment by way of medical insurance a commission, fee, or other remuneration shall apply to the Authority providers.

for registration as a medical insurance provider under this Act.

9 of 2003, s.

14, 10 of 2010, s.

58.

(2) Subject to this Act, the provisions of this Act or of any regulations made there under with respect to the registration and regulation of brokers shall, mutatis mutandis, apply to medical insurance providers.

151.

(1) An application for registration under section 150 or Application for renewal of registration under section 188 shall be in the form required registration.

by the Commissioner and shall be accompanied by (a) where the application is for registration as a broker, a professional indemnity policy of insurance in such form as may be prescribed and for such amount as may be prescribed whether as a single sum or according to a specic formula; (b) where the application is for registration as an agent, a document under the hand of the principal ofcer of the insurer for whom he proposes to function as an agent certifying that the person has been appointed as an agent by the insurer through an agreement or appointment letter, and that the insurer is satised that the applicant has the knowledge and experience necessary to act as an agent; (c) a statement of business transacted in the preceding nancial year in the prescribed form; (d) the prescribed fee; (e) such other documents as may be prescribed.

(2) No person shall (a) make a statement in an application, account, written information or document submitted under this section; or (b) give to the Commissioner a certicate under subsection (1) (b), that is false or misleading.

CAP11 4.

487 Insurance [Rev.

2012 (3) A person who contravenes the provisions of subsection (2) shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings.

Disqualications.

152.

The Commissioner shall not register or renew the registration 12 of 1994, s.

27, of or keep registered any person as a broker, agent, risk manager, loss 9 of 2003, s.

15.

assessor, loss adjuster, insurance surveyor, medical insurance provider or claims settling agent if (a) the applicant has been found to be of unsound mind by a court of competent jurisdiction; (b) he has within the ve years preceding the date of application been convicted of an offence relating to fraud or dishonesty; (c) he has at any time within the ve years preceding the date of his application become bankrupt, applied to take the benet of the law for the relief of bankrupt or insolvent debtors, compounded with his creditors or made an assignment of his remuneration for their benet; (d) the applicant, being a broker, is a director, employee or holds more than one per cent of the shares or controlling interest in a registered insurer.

(e) the applicant is a natural person, the applicant, or where the applicant is a corporate person, the principal ofcer in Kenya of the applicant responsible for the transaction of business (i) does not, in the opinion of the Commissioner, have sufcient knowledge, skill and experience to satisfactorily discharge his duties and functions; or (ii) has been found guilty of, or warned or cautioned in writing by the Commissioner on at least three separate occasions with regard to, unethical business practices.

Registration and 153.

(1) Where the Commissioner is satised that re-registration.

18 of 1986, Sch., 4 of 1999, s.

63, (a) volume of business which is likely to be available to, and 10 of 2010, s.

59.

the earning prospects of, an applicant are adequate; (b) the business in respect of which the application is made will be conducted in accordance with accepted professional Rev.

2012] Insurance CAP.

487 115 standards; (c) in the case of a corporate person the nancial standing of the applicant is sound; (d) the knowledge, skill and experience of the applicant or, in the case of a corporate person, the knowledge, skill and experience of the principal ofcer in Kenya are adequate; (e) in the case of a broker, the professional indemnity policy of insurance is satisfactory; (f) the applicant is not disqualied under this Act; (g) the applicant is, and is likely to continue to be, able to comply with such of the provisions of this Act and regulations and directions made or issued under this Act as are applicable to the applicant; (h) the prescribed fee has been paid: (i) it is otherwise in the public interest that the applicant should be registered, he may, subject to such terms and conditions as he considers necessary, including in the case of a broker the provision of such bank guarantee as may be prescribed, register or renew the registration of an applicant under this Part.

(2) Subject to subsection (3) and notwithstanding anything to the contrary contained in this Act, no broker shall be registered under this Act unless he is a company incorporated under the Companies Act with a paid up capital of not less than one million of which not less than sixty percent is owned by Kenya citizens or by a partnership whose partners are all citizen of Kenya or by a corporate body whose shares are wholly owned by the Government: Provided that a broker who is not incorporated under the Companies Act on the appointed date may be registered as on that date but his registration shall not be renewed at the time of the next renewal unless he is incorporated under the Companies Act at that time.

(3) A broker already carrying on business as an insurance broker on the appointed date without complying with the provisions of subsection (2) relating to paid up capital may be registered as a broker, but at the time of each subsequent renewal of the registration until he complies fully with the requirement his registration shall not be renewed CAP11 6.

487 Insurance [Rev.

2012 unless he has acquired after the immediately preceding registration or renewal of registration, as the case may be, paid up capital or additional paid up capital equal to not less than one-third of the deciency which existed on the appointed date.

(4) Subject to subsection (3), a broker already carrying on business as an insurance broker on the appointed date without complying with the minimum shareholding by Kenya citizens as required under subsection (2) shall comply with that requirement before the expiry of three years from the appointed date.

(5) Notwithstanding anything to the contrary contained in this Act, no insurance agent shall be registered under this Act unless (a) if an individual, he is a citizen of the East African Community; or (b) if a partnership, all the partners are citizens of the East African Community; or (c) if a company incorporated under the Companies Act, it is wholly owned by citizens of the East African Community.

Business by agents.

154.

Subject to the terms and conditions contained in the 9 of 2003, s.

16, agreement or appointment letter referred to in section 151 (1) (b), an 11 of 2006, s.16.

agent may enter into a contract which has the effect of enabling him to solicit or procure insurance business of the same class or sub-class of insurance business or other classes of insurance business for more than one insurer or to solicit or procure insurance business of the same class or sub-class of insurance business for more than one insurer.

Returns.

155.

(1) Every corporate person registered under this Part shall furnish such audited accounts, statements and returns relating to its business at such time and in such form as may be required by the Commissioner.

(2) If it appears to the Commissioner that any account, statement or return furnished to him under provisions of this Act is inaccurate or incomplete in any respect, he may (a) require further information, which shall be certied, if he so directs, by an auditor or other person, as he may consider necessary; or (b) require any document for his examination.

(3) Where Rev.

2012] Insurance CAP.

487 117 (a) a person registered under this Part fails to comply with a requirement made under subsection (2); or (b) the Commissioner is not satised as to the truth or accuracy of any account, statement or return supplied under subsection (1), or of any further information or document supplied under subsection (2), and has in writing so informed the person registered, giving his reasons, that person shall be deemed to have failed to comply with subsection (1).

156.

(1) No insurer shall assume a risk in Kenya in respect of Advance payment of insurance business unless and until the premium payable thereon is premiums.

received by him or is guaranteed to be paid by such person in such 12 of 1994, s.

28, manner and within such time as may be prescribed, or unless and until 4 of 1999, s.

74, a deposit, of a prescribed amount, is made in advance in the prescribed 11 of 2006, s.

17, manner.

9 of 2007, s.

61, 10 of 2010, s.

60.

(2) (Deleted by 9 of 2007, s.

61).

(3) No agent shall collect the premium of a policy insurance canvassed or solicited by him, and no agent shall signify acceptance of the risk on a policy of insurance canvassed or solicited by him, except in so far and to the extent that he has been authorized by an insurer to collect the premium or to issue cover notes, as the case may be; but nothing in this subsection shall prohibit an agent from collecting and transmitting to an insurer a cheque drawn in favour of an insurer.

(4) A premium collected by an agent or a cheque received by him shall be deposited with, or dispatched and received by the insurer before commencement of the insurance cover.

(5) The requirements of this section may be relaxed by regulations in respect of particular categories of the policies.

(6) A broker shall prepare, as at the 31st March, 30th June, 30th September and 31st December of each nancial year, a statement in the prescribed form showing the premium due to insurers from the broker for the prescribed durations and shall furnish each statement, duly signed in the prescribed manner, to the Commissioner within two months after the end of the period to which it relates.

(7) (Deleted by 10 of 2010, s.

60.).

(8) All monies received by a broker from a client or an insurer shall be deposited in a separate client account in a bank licensed under CAP11 8.

487 Insurance [Rev.

2012 the Banking Act, which shall be held in trust and under no circumstances be mixed with moneys or working capital belonging to the broker: Provided that the broker may draw money from the client account for the purpose of remitting premium payments to insurers or payments to insurers or payment of claim money received from an insurer on behalf of his client.

(9) In effecting the premium payments under subsection (8), the broker may deduct the brokerage commission due to him under the specic risks in respect of which the payment is made and shall prepare a statement showing such details with respect to the remittance, as the Commissioner may prescribe.

(10) Any moneys earned by ways of interest on sums deposited in a client account or under this section may accrue to the benet of the broker.

(11) The client account of a broker shall be audited annually by an auditor qualied under section 161 of the Companies Act, who shall issue a certicate to the Commissioner certifying whether or not the account is managed in accordance with the provisions of this Act.

(12) An auditors certicate under subsection (11) shall be a mandatory requirement for the renewal of a brokers registration.

(13) If the auditors certicate under subsection (9) indicates that the client account is not managed in accordance with the provisions of this Act, the Commissioner shall forthwith cancel the registration of the broker.

(14) Where the Commissioner cancels the registration of a broker under subsection (13) he shall cause notice of the cancellation to be published in the Gazette without undue delay.

Part xVI (s.

157-163 Repealed by 11 of 2006, s.

18).

Part xVIIadVertIsements and statements Misleading 164.

(1) A person who, by an advertisement, statement, promise advertisements, etc.

or forecast which he knows to be misleading, false or deceptive, or prohibited.

by dishonest concealment of material facts, or by the reckless making (dishonestly or otherwise) of an advertisement, statement, promise or forecast which is misleading, false or deceptive, induces attempts to induce another person to enter into or offer to enter into a contract, transaction or arrangement with a member of the insurance industry relating to insurance business, shall be guilty of an offence and liable Rev.

2012] Insurance CAP.

487 119 to a ne not exceeding ve thousand shillings.

(2) For the purpose of this section, including proceedings under this section, an advertisement, statement, promise or forecast issued by person on behalf of or to the order of another person shall be treated as an advertisement, statement, forecast or promise issued by that other person.

(3) A person who in the ordinary course of his business issues an advertisement, statement, promise or forecast to the order of another person, being an advertisement, statement, promise or forecast the issue of which by that other person constitutes an offence under subsection (1) shall not himself be guilty of the offence if he proves that the matters contained in the advertisement were not (wholly or in part) devised or selected by him or by any person under his direction or control.

165.

(1) Where an advertisement, notice or other ofcial Advertisements publication of an insurer or broker to whom this Act applies contains relating to capital.

a statement of the amount of the authorized capital of the insurer or broker, the publication shall also contain a statement of the amount of capital which has been subscribed and the amount paid up.

(2) A person who contravenes subsection (1) shall be guilty of an offence and liable to a ne not exceeding two thousand shillings.

166.

(1) No person shall publish in respect of an insurer or broker, Issue of shares or in respect of an insurer or broker proposed to be formed, a prospectus, or debentures by notice, circular, advertisement or other invitation offering to the public companies.

for subscription any shares in, or debentures of, the company or proposed 12 of 1994, s.

32.

company unless the prospectus, notice, circular, advertisement or other invitation is rst submitted to and approved by the Commissioner.

(1A) No person shall transfer or dispose of and no person shall acquire more than ten per cent of the paid up share capital or voting rights of an insurer without the prior written approval of the Commissioner; and any such transfer disposal or acquisition effected in a manner contrary to this subsection shall be null and void ab initio.

(2) A person acting as promoter of a proposed insurer or broker shall not accept an ofce of prot in the insurer or broker or the offer of a pecuniary advantage, other than as provided in the prospectus, notice, circular, advertisement or other invitation.

(3) In this section debenture, in relation to a company, includes debenture stock, bonds, notes and any other document evidencing or acknowledging indebtedness of the company, whether constituting a charge on the CAP120.

487 Insurance [Rev.

2012 property of the company or not; share, in relation to a company, means a share in the capital of the company, and includes stock.

(4) A person who contravenes the provisions of this section shall be guilty of an offence and liable to a ne not exceeding two thousand shillings.

Publication of 167.

(1) No person shall publish an account, abstract, report or returns.

other document deposited with or required to be deposited with the Commissioner by or under this Act in a form other than that in which it has been furnished to the Commissioner: Provided that nothing in this subsection shall prevent a person from publishing a true and accurate summary from any such account, abstract, report or other document for the purpose of publicity.

(2) A person who contravenes the provisions of subsection (1) shall be guilty of an offence and liable to a ne not exceeding two thousand shillings.

Part xVIIIlegal ProCeedIngs and aPPeals Protection for 168.

(1) No legal proceedings shall be instituted in any court against the Minister or Board or any person authorized by the Minister ofcials acts.

or Board for anything done or intended to be done in good faith under 11 of 2006, s.

19.

this Act.

(2) No compensation shall be payable to any person for any loss, damage or harm directly or indirectly caused by anything done or intended to be done in good faith by the Minister or Board or any person authorized by the Minister or Board under this Act.

The Tribunal.

169.

(1) The Minister may, by notice in the Gazette, establish a Tribunal for the purpose of hearing appeals under this Act.

(2) The Tribunal shall consist of a chairman and not less than two and not more than four other members who shall be appointed by the Minister and shall hold ofce for such period and upon such terms and conditions as the Minister may determine.

(3) The quorum for a meeting of the Tribunal shall be the chairman and two other members.

(4) The members of the Tribunal shall be entitled to receive such allowances as the Minister may determine.

Rev.

2012] Insurance CAP.

487 121 (5) The members of the Tribunal shall not be personally liable for any act or default of the Tribunal done or committed in good faith in the course of exercising the powers conferred by this Act.

(6) The Minister may make rules (a) prescribing the manner in which an appeal shall be made to the Tribunal and the fees to be paid in respect of an appeal; (b) prescribing the procedure to be adopted by the Tribunal in hearing an appeal and the records to be kept by the Tribunal; (c) prescribing the manner in which the Tribunal shall be convened and the places where and the time at which sittings shall be held; (d) prescribing a scale of costs which may be awarded by the Tribunal; and (e) generally for the better carrying out of the provisions of this Act relating to the Tribunal and appeals thereto.

170.

(1) On the hearing of an appeal the Tribunal shall have all Powers of Tribunal.

the powers of a subordinate court of the rst class to summon witnesses, to take evidence upon oath or afrmation and to call for the production of books and other documents.

(2) Where the Tribunal considers it desirable for the purpose of avoiding expense or delay or any other special reason so to do, it may receive evidence by afdavit and administer interrogatories and require the person to whom interrogatories are administered to make a full and true reply to the interrogatories within the time specied by the Tribunal.

(3) In its determination of any matter the Tribunal may take into consideration any evidence which it considers relevant to the subject of an appeal before it, notwithstanding that such evidence would not otherwise be admissible under the law relating to evidence.

(4) The Tribunal shall have power to award the costs of any proceedings before it and to direct that costs shall be taxed in accordance with any scale prescribed.

(5) All summonses, notices or other documents issued under the hand of the chairman of the Tribunal shall be deemed to be issued by CAP122.

487 Insurance [Rev.

2012 the Tribunal.

(5) Any interested party may be represented before the Tribunal by an advocate or by any other person whom the Tribunal may admit to be heard on behalf of the party.

171.

(1) Where the Tribunal awards costs in any appeal, the Enforcement of Tribunal shall, on application by the person to whom the costs are orders for costs.

awarded, issue to him a certicate stating the amount of the costs.

(2) Every certicate issued under subsection (1) may be led in the court by the person in whose favour the costs have been awarded and, upon being so led, shall be deemed to be a decree of the court and may be executed as such; but an order for costs against the Government shall not be enforced except in the manner provided for by the Government Cap.

40.

Proceedings Act.

Penalty for 172.

Any person summoned by the Tribunal to attend and give disobedience of evidence or to produce any records, books of account, statements, or summons to give other documents, or required to answer interrogatories and who, without evidence etc.

sufcient cause (a) refuses or fails to attend at the time and place mentioned in the summons served on him; (b) refuses or fails to answer, or to answer fully and satisfactorily, to the best of his knowledge and belief all questions lawfully put to him by or with the concurrence of the Tribunal; or (c) refuses or fails to produce any records, books of account, statements or other documents which are in his possession or under his control mentioned or referred to in any summons served on him, shall be guilty of an offence and liable to a ne not exceeding two thousand shillings.

Appeals from 173.

(1) A person aggrieved by a decision of the Commissioner Commissioners under this Act may, within one month from the date on which the decisions.

decision is intimated to him, appeal to the Tribunal which may, subject to such terms and conditions as it may consider necessary, uphold, reverse, revoke or vary that decision.

(2) Except as provided in this section the decision of the Tribunal on an appeal made to it under subsection (1) shall be nal and conclusive.

Rev.

2012] Insurance CAP.

487 123 (3) A person aggrieved by a decision of the Tribunal made under subsection (1) may, if it involves a question of law, within one month from the date on which the decision is intimated to him, appeal therefrom to the court.

(4) A reference in this section to a question of law does not include a reference to a question whether there is sufcient evidence to justify a nding.

(5) The Chief Justice may make rules for regulating the practice and procedure in connection with an appeal under subsection (3) and for the better carrying into effect the provisions of that subsection.

174.

(1) No court inferior to that of a magistrates court of the Cognizance of rst class shall hear and determine any matter relating to an offence offences and under this Act.

restrictions on (2) No proceedings for an offence under this Act shall be instituted institution of without the written sanction thereto of the Attorney-General.

proceedings.

(3) Proceedings for an offence under this Act may (without prejudice to any jurisdiction apart from this subsection) be taken against a body corporate at any place at which the body corporate has a place of business, and against any other person at any place at which he has a place of business or is for the time being resident.

175.

(1) Where an offence under this Act committed by a body Criminal liability of corporate is proved to have been committed with the consent or directors, etc.

connivance of, or to be attributable to any neglect on the part of, any 12 of 1994, s.

33.

director, chief executive, principal ofcer, manager, secretary or other similar ofcer of the body corporate or any person who was purporting to act in such capacity, he, as well as the body corporate, shall be guilty of that offence unless he proves that he did not know of the commission of the offence and was not reasonably in a position to know of it, or that he took all reasonable steps to prevent the commission of the offence.

(2) A person convicted of an offence under subsection (1), shall be liable to a ne not exceeding one hundred thousand shillings, or, in the case of a natural person, to imprisonment for a term not exceeding ve years, or to both.

(3) Where a person convicted under this section is a body corporate, then, not withstanding any other penalty imposed under subsection (2), the conviction shall constitute sufcient grounds for cancellation of its registration and the appointment of a manager under section 67C.

CAP124.

487 Insurance [Rev.

2012 Criminal 176.

(1) Proceedings for an offence alleged to have been proceedings against committed under this Act by an unincorporated body shall be brought unincorporated in the name of that body (and not in that of any of its members) and, bodies.

for the purposes of any such proceedings, any rules of court relating to the service of documents shall have effect as if that body were a corporation.

(2) A ne imposed on an unincorporated body on its conviction of an offence under this Act shall be paid out of the funds of that body.

Documents to be 177.

(1) Every document purporting to be certied by the Board received in evidence.

to be a document deposited with him under the provisions of this Act, 11 of 2006, s.

20.

and every document purporting to be similarly certied to be a copy of that document, shall be deemed to be such a document or copy, as the case may be, and shall be received in evidence as if it were the original document unless some variation between it and the original document is proved.

(2) The Board may direct any documents deposited with the Commissioner under this Act, or certied copies thereof, to be kept open for inspection, and copies thereof may be procured by any person on payment of such fees as may be prescribed.

(3) Every document purporting to be certied by the Registrar of Companies to be a copy of a document deposited with him under this Act, shall be deemed to be a copy of that document, and shall be received in evidence as if it were the original document, unless some variation between it and the original is proved.

General penalty.

178.

A person who contravenes any provision of this Act or any 12 of 1994, s.

34.

regulation made there under for which no specic penalty is imposed shall be guilty of an offence and liable to a ne not exceeding one hundred thousand shillings.

Part xIxmInIsters Powers Policy holders 179.

(1) The Minister shall, for the protection of policy holders, compensation Fund.

establish a policy holders compensation fund, in this section referred to 6 of 2005, s.

41.

as the Fund, to provide compensation to policy holders of an insurer 11 of 2006, s.

21, wound up under section 123(2).

8 of 2008, s.

63, (2) Where a Fund is established under subsection (1), the Minister 10 of 2010, s.

61.

shall appoint a board of trustees, in this section referred to as the Board, for the management and administration of the Fund.

(2A) The functions of the Board shall be to Rev.

2012] Insurance CAP.

487 125 (a) provide compensation to the policyholders of an insolvent insurer; (b) monitor, in consultation with the Commissioner where necessary, the risk prole of any insurer; (c) advise the Minister on the national policy to be followed with regard to matters relating to compensation of policyholders and to implement all government policies relating thereto; and (d) perform such other functions as may be conferred on it by this Act or by any other written law.

(2B).

The Board shall have all the powers necessary for the proper performance of its functions under this Act, and without prejudice to the generality of the foregoing, shall have power to (a) control, supervise and administer the assets and liabilities of the Fund in such manner and for such purposes as best promote the interests of policyholders; (b) employ such persons and engage the services of such consultants as may be necessary, on such terms and conditions for the proper and efcient exercise of its functions; (c) enter into association with such other bodies or organizations, within or outside Kenya, as it may consider desirable or appropriate in furtherance of the purposes for which the Fund is established; (d) invest any of its surplus funds in securities which for the time being trustees may by law invest in, or in any other securities which the Treasury may, from time to time, approve; (e) receive contributions paid by insurers and policyholders, grants provided by Parliament, gifts, donations or endowments on behalf of the Fund and make legitimate disbursements therefrom; (f) subject to the provisions of this Act, regulate its own procedure.

(3) The Board shall be a body corporate with perpetual succession and a common seal and shall, in its corporate name, be capable of (a) suing and being sued; CAP126.

487 Insurance [Rev.

2012 (b) taking, purchasing or otherwise acquiring, holding, charging or disposing of movable or immovable property; (c) borrowing or lending money; and (d) doing or performing all such other acts necessary for the proper performance of its functions under this Act which may lawfully be done or performed by a body corporate.

(4) The Board shall comprise (a) a chairman, who shall be a person not connected with any insurer, broker or insurance agency; (aa) the Commissioner of Insurance or his designated representative; (b) one person nominated by insurers carrying on general business; (c) one person nominated by insurers carrying on long term insurance business; (d) one person nominated by insurance brokers; (e) one person representing interests which the Minister considers should be represented on the Board; and (f) one person nominated by persons carrying on the business of assessing losses in insurance.

(g) the Permanent Secretary to the Treasury or a person deputed by him in writing.

(5) The Minister shall prescribe the qualications and terms of service of the chairman and members of the Board, including the procedure for their appointment.

(5A) The Minister shall, in consultation with the Board, appoint a Managing Trustee who shall be the chief executive and secretary to the Board, and who shall hold ofce for such period and on such terms and conditions of service as may, from time to time be determined in writing by the Minister in consultation with the Board.

(6) The Minister may require payment of a monthly contribution to the Fund to be paid by every policy holder and insurer, in such Rev.

2012] Insurance CAP.

487 127 amount and at such times as the Minister may, in consultation with the Board, prescribe.

(7) A contribution required under subsection (6) shall be remitted to the Board by the insurer, in such manner as may be prescribed.

(8) If an insurer, for any reason, fails to pay its contribution to the Board within the prescribed period, the insurer shall be liable to pay to the Board a penalty interest charge, which shall be prescribed by the Minister in consultation with the Board.

(9) If an insurer fails to pay the prescribed contribution to the Board and any outstanding penalty interest charge- (a) the Board shall hold the directors of the insurer who has defaulted in remitting a statutory contribution to be severally and jointly liable for the payment of the outstanding contribution together with the applicable interest; and (b) the liability of the directors shall commence on the expiry of ninety days from the due date of the outstanding statutory contribution.

(10) A contribution paid by an insurer to the Board may be treated as an item of the expenses of management of the insurer for the nancial year in which the amount is paid.

(11) The Minister may, in consultation with the Board, make regulations generally for the better carrying out the provisions of this section.

179A.

No matter or thing done by a member of the Board, the Protection from secretary to the Board, or an ofcer, employee or agent of the Board personal liability.

shall, if the matter or thing is done bonade for executing the functions, 10 of 2010, s.

62.

powers, or duties of the Board under this Act, render the member, secretary, ofcer, employee or agent, or any person acting on their direction personally liable to any action, claim, or demand whatsoever.

180.

The Minister may prescribe all matters which by this Act are Power to prescribe.

required or permitted to be prescribed, or which are necessary, desirable or convenient to be prescribed, for giving effect to this Act.

181.

The Minister may on the advice of the Board, by notice in the Power of exemption.

Gazette, subject to such terms and conditions as he may on the advice 11 of 2006, s.

22.

of the Board specify, exempt any person from any of the provisions of this Act.

CAP128.

487 Insurance [Rev.

2012 Part xxgeneral ProVIsIons relatIng to regIstratIons and CertIfICates Interpretation of Part.

182.

In this Part applicant means a person applying for registration, renewal of registration or alteration of registration under this Act; register means a register required to be kept and maintained under section 183; registered person means a person registered under this Act as an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster or claims settling agent.

Registers of 183.

(1) For the purposes of this Act, the Commissioner shall cause authorized persons to be kept and maintained one or more registers in respect of persons to be kept by required to be registered there under.

Commissioner.

(2) Subject to this Act and to any regulations made thereunder, a register shall be kept and maintained in such form and manner as the Commissioner directs.

Notication of 184.

The Commissioner shall notify in the Gazette, within one year registered persons.

of the appointed date or soon as practicable thereafter, and at intervals of not more than one year thereafter, the names of registered persons Inspection of and the type of business in respect of which they are registered.

registers.

185.

Any person may, on application in accordance with the directions of the Commissioner and on payment of the prescribed fee (if any), inspect a register.

Evidence of matters 186.

A certicate under the hand of the Commissioner certifying in register.

as to any matter relating to the contents of a register shall be received in all courts as evidence of the matter certied.

Alteration of 187.

Where a registered person registration.

12 of 1987, s.

7.

(a) in accordance with this Act ceases to carry on business of the type in respect of which he is registered; or (b) being an insurer, gives notice in writing to the Commissioner that he wishes to carry on insurance business of a class not previously undertaken, the Commissioner may, subject in the case of additional registration to compliance with the provisions relating thereto and to such terms and conditions as he considers necessary Rev.

2012] Insurance CAP.

487 129 (i) cancel the registration except that, in the case of an insurer, such cancellation shall be made only with the prior approval in writing of the Minister; (ii) alter the relevant register; (iii) cancel the certicate of registration; (iv) alter the certicate of registration; (v) issue a new certicate of registration, as the circumstances require.

188.

(1) Subject to this Act, the registration of a registered person Expiry and renewal of registration.

shall expire on the 31st December of the year of registration.

9 of 2007, s.

62, 8 of 2009, s.

49.

Provided that where an application for its renewal is made under this section, the registration shall be deemed to continue in force until the application for the renewal is determined and the registration is renewed.

(2) Subject to subsection (3), an application for the renewal of registration for a year shall be made on or before the 30th September of the preceding year in the prescribed form and shall be accompanied by the prescribed fee.

(3) The Commissioner may extend the time for making an application for renewal of registration on payment of such penalty, not exceeding the prescribed fee for registration, as he may require.

189.

(1) Upon the registration or renewal of any registration, the Issue, display and surrender of Commissioner shall issue a certicate of registration which shall be prominently displayed by the registered person at his principal place certicates.

of business in Kenya in a part thereof to which the public have access, and copy thereof shall be similarly displayed at each of the branches of the registered person in Kenya.

(2) The Commissioner may, on payment of the prescribed fee, issue a duplicate certicate to replace a certicate which has been lost, destroyed or damaged or in any case where he considers it necessary.

(3) Upon the cancellation of a registration the person who was registered shall forthwith return his certicate of registration to the Commissioner.

CAP130.

487 Insurance [Rev.

2012 (4) A registered person shall not display a certicate of registration after the cancellation or expiry of the registration in respect of which it issued.

(5) A person who contravenes the provisions of subsection (3) or (4) shall be guilty of an offence and liable to a ne not exceeding one thousand shillings.

Name of registered 190.

(1) If the name of a registered person who has been registered person.

is identical to a name by which another registered person has already been registered, or so nearly resembles it as to be likely to deceive, the second registered person shall, if directed in writing to do so by the Commissioner and subject to the Companies Act, change his name within a time to be specied in the direction.

(2) No insurer shall, after the expiry of six months from the appointed date, use, or carry on business under, a name which is likely to mislead the public or to give the impression that the insurer is carrying on any business other than insurance business.

(3) No broker, agent, insurance surveyor, loss assessor, loss adjuster, risk manager or claims settling agent shall, after the expiry of six months from the appointed date, use, or carry on business under, a name which includes the word insurance or assurance in such a way as to mislead the public or to give the impression that he carries on insurance business.

(4) A person who contravenes the provisions of subsection (2) or (3) shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings, and where the offence is a continuing one, to a further ne of one hundred shillings for every day during which the offence continues.

Prohibition of other 191.

(1) No person shall be registered under this Act as an insurer, business.

reinsurer or broker if he carries on or intends to carry on in Kenya any business other than the business in respect of which he applies for registration.

(2) No person registered under this Act as an insurer, reinsurer or broker shall carry on in Kenya any business other than the business in respect of which he is registered.

(3) For the purposes of this section, an insurer shall not be deemed to be carrying on a business other than that in respect of which he is registered merely by reason of his having a subsidiary which is registered for a class of insurance business for which the insurer is not registered: Rev.

2012] Insurance CAP.

487 131 Provided that nothing in this subsection shall allow an insurer not registered for long term insurance business to own a subsidiary registered for any class of long term insurance business.

(4) A person who contravenes the provisions of this section shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings.

192.

The Commissioner may in writing require an applicant for Further information.

registration or renewal of registration under this Act to furnish him with such written information as he may require relating to the applicant or his business in respect of which registration or renewal thereof is sought, and the Commissioner shall not proceed with an application until that information has been furnished.

193.

(1) Whenever any circumstances arise which affect the Alteration in application or the contents of a document furnished under this Act to the particulars furnished.

Commissioner with or in support of or in connection with an application for registration, the applicant or registered person, as the case may be, shall in writing, within seven days of those circumstances arising, furnish full details of the circumstances to the Commissioner.

(2) A person who contravenes the provisions of subsection (1) shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings.

194.

A person who makes a false or misleading statement in False or misleading an application for registration or renewal of registration or alteration statements.

of registration, or in any document furnished under this Act to the Commissioner with or in support of or in connection with an application for registration or renewal of registrations shall be guilty of an offence and liable to a ne not exceeding ve thousand shillings.

195.

Where the Board refuses an application for registration, Refusal to register.

renewal or alteration of registration, the Board shall record the reasons 12 of 1987, s.

8, for its decision and shall furnish copies thereof to the applicant and 11 of 2006, s.

23.

the Minister.

196.

(1) Where a registered person requests, by notice in writing Cancellation of given to the Commissioner, that his registration be cancelled either totally registration.

or in respect of any particular part of his business, the Commissioner 12 of 1987, s.

9, may, subject to such terms and conditions as he considers necessary, 11 of 2006, s.

24.

by notice in writing, cancel the registration of the person, either totally or in respect of any particular part of his business.

(2) The Commissioner, after giving a registered person a CAP132.

487 Insurance [Rev.

2012 reasonable opportunity of making representations, may by notice in writing cancel the registration of that person, either totally or in respect of any particular part of his business (a) if the person fails to comply with or acts in contravention of this Act, or any regulation or direction made or issued under this Act; (b) in the case of an insurer, if the Commissioner has reason to believe that an amount due by the insurer under a judgment entered in an action in Kenya arising out of a policy of insurance issued by the insurer has remained unpaid for three months after the date of the nal adjudication in that action; (c) if the Commissioner is satised that the business of the person registered is not being conducted in accordance with sound insurance or business principles; (d) where, having regard to the nancial circumstances of the person registered, the Commissioner is satised that the person cannot carry on the business, or a part of the business, for which he is registered, as the case may be, in a satisfactory and efcient manner; (e) where, having regard to the nature and quality of the staff of the registered person, including the professional qualications, knowledge and experience of the staff, the Commissioner is satised that the person cannot carry on the business, or a part of the business, for which he is registered, as the case may be, in a satisfactory and efcient manner; (f) if the person is in liquidation; (g) if the business of the registered person has been transferred to or amalgamated with the business of another person without the approval of the Minister; (h) in the case of an insurer, if the business of the insurer is wholly or to an unreasonable extent reinsured with another person; (i) where the Commissioner has reason to believe that the person registered has not commenced to carry on insurance business or any class of business in Kenya within the period of twelve months after he was registered; (j) where the Minister considers it is otherwise in the public Rev.

2012] Insurance CAP.

487 133 interest and so directs the Commissioner in writing.

(3) A cancellation of registration made by the Commissioner under subsection (2), other than paragraph (f), (g) or (i) thereof, shall take effect thirty days after the date of the notice, and after that time no insurer whose registration has been cancelled shall enter into a new contract of insurance; but all rights and liabilities in respect of contracts of insurance entered into by him before the cancellation takes effect shall, subject to subsection (5), continue as if the cancellation had not taken place.

(4) The Commissioner may with the prior approval of the Minister revive a registration which has been cancelled under the provisions of subsection (2), other than paragraph (f), (g) or (i) thereof, if within six months from the date on which cancellation took place the registered person concerned satises the Commissioner that he has complied with any requirement of this Act or any subsidiary legislation made thereunder and complies with any further directions given to him by the Commissioner.

(5) Where the registration of an insurer has been cancelled under this section the Commissioner may with the prior approval of the Minister, after the expiry of six months from the date on which the cancellation took effect, apply to the court to wind up the insurer unless the registration of that insurer has been revived under subsection (4) or an application for winding up the insurer has already been made to the court.

(6) Where in any case referred to in subsection (1) the default or circumstances relates to one or more, but not all, of the parts of business carried on by the registered person, the Commissioner may with the prior approval of the Minister, upon the cancellation of the registration of the person, subject to such terms and conditions as he considers necessary, register the person in respect of any part of the business and issue a new certicate in respect of that class of business.

196A.

The Commissioner shall, at the beginning of each calendar Notication of year, notify in the Gazette and in at least two daily newspapers of national cancellation of circulation, names of the persons whose registration is cancelled under registration.

this Act and the type of business in respect of which the cancellation 9 of 2003, s.

17.

of registration is done.

197.

(1) A broker or agent registered under this Act shall keep Records to be and maintain at his principal place of business in Kenya a record of maintained by the name of every client, policy number, premium paid, subject matter registered persons.

of insurance, the date of the inception of the policy, date of renewal, sum insured and, in respect of claims settled by the broker on behalf CAP134.

487 Insurance [Rev.

2012 of an insurer, the amount and date of claim made, the date on which the claim was paid, the amount paid, and, in the event of a claim being repudiated, the date and reasons for repudiation, and, in the event of partial settlement, the reasons therefor.

(2) An insurer registered under this Act for carrying on general insurance business shall keep a record of the name of every policy holder, policy number, premium paid, subject matter of insurance, the date of the inception of the policy, date of renewal, sum insured, the amount and date of claim made, the date on which the claim was paid, the amount paid, and, in the event of a claim being repudiated, the date and reasons for repudiation, and, in the event of partial settlement, the reasons therefor.

(3) An insurer registered under this Act for carrying on long term insurance business shall keep and maintain the particulars referred to in subsection (2) and in addition a record of the name of any assignee or other person having an interest in a policy, and the name of every nominee and the dates of assignment or nomination, as the case may be.

(4) A person registered under this Act other than an insurer, broker or agent shall keep and maintain a full record of all services undertaken by him in pursuance of his registration.

(5) Every person registered under the Act shall also keep and 12 of 1987, s.

10, maintain such further records of information as may be prescribed.

11 of 2006, s.

25.

Part xxathe InsuranCe PremIum leVy Imposition of 197A.

(1) Subject to this Act, there shall be charged and collected Insurance Premium a levy to be known as the insurance premium levy, which shall be paid Levy.

by every insurer registered or authorized under this Act to carry on 12 of 1987, s.

10, insurance business in Kenya, at such rate and in such manner as the 9 of 1992, s.

59 Minister may prescribe.

4 of 1993, s.

63, 12 of 1994, s.

35, 8 of 1997, s.

57, (2) The Minister may, in consultation with the Board, by Order 4 of 1999, s.

75.

published in the Gazette, prescribe the rates of the levy imposed under subsection (1) in respect of (a) gross direct premiums written by all insurers registered or authorized under this Act to carry on insurance business in Kenya; and (b) reinsurance premiums (before deducting commissions, allowances or other payments) paid or credited to Rev.

2012] Insurance CAP.

487 135 reinsurance business outside Kenya by an insurer registered or authorized under this Act to carry on insurance business in Kenya in respect of risks ordinarily in Kenya, except for reinsurance premiums relating to marine, aviation, industrial re, catastrophe, excess of loss relating to marine, aviation and industrial risks, and such other category of insurance as the Minister may prescribe upon recommendation of the Authority.

(3) The levy shall be computed as a percentage of the gross direct premiums written by an insurer or reinsurer under subsection (2) (a) or reinsurance premium paid or credited to a reinsurance business outside Kenya, as the case may be, under subsection (2) (b).

(4) An order under this section may contain provisions as to the time at which any amount payable by way of the levy shall become due.

(5) All moneys received in respect of the levy shall be paid into the Insurance Regulatory Authority Fund.

(6) If a person fails to pay any amount payable by him by way of the levy on or before the date prescribed by the order, a sum equal to ve per cent of the amount shall be added to the amount due for each month or part thereof during which it remains unpaid.

(7) Any amounts of money which are outstanding on the date prescribed by the Order issued under this section shall be a civil debt recoverable summarily by the Authority.

Part xxbInsuranCe traInIng leVy 11 of 2006, s.

26.

197B.

(1) Subject to this Act, there is imposed a levy to be known Imposition of as the insurance training levy which shall be charged on policyholders Insurance Training and collected by the insurer, and which shall be paid in accordance Levy.

with this section.

12 of 1987, s.

10, 13 of 1995, s.

94.

(2) The Minister may, in consultation with the Board, by Order published in the Gazette, prescribe the rates of levy, which shall be calculated as a percentage of the gross direct premiums written by the insurer in respect of general insurance business.

(3) The levy shall be paid by every insurer who shall, after the end of each calendar month, submit to the Authority a monthly return thereof in the prescribed form, showing the total levy due to him from policyholders for that particular month.

CAP136.

487 Insurance [Rev.

2012 (4) The levy shall become payable at the end of each month in which the premium was received by the insurer and shall be paid not later than the last day of the month immediately succeeding that in which the levy became due.

(5) Where any amount of the levy remains unpaid as specied in subsection (4), a penalty equal to ve per cent of the unpaid levy or part thereof shall become due and payable by the insurer concerned.

(6) Any penalty payable under this subsection shall be deemed to be a levy for the purpose of this Part.

(7) All monies realised under this section shall be charged on the gross direct premiums written by every insurer and shall be used by the Insurance Training and Educational Trust which is responsible for the management of the College of Insurance for the purpose of running the affairs of that College.

Offences and 197C.

(1) Any insurer who fails to pay any levy or penalty due penalties.

from him on or before the day upon which the same are payable shall 12 of 1987, s.

10, be guilty of an offence and liable to a ne not exceeding ve hundred 11 of 2006, s.

26.

thousand shillings and, if the offence is a continuing one, to a further ne of one thousand shillings for every day during which the offence continues.

(2) Where an insurer is guilty of an offence under this section, then notwithstanding the imposition of any penalty under section 197C, the commission of the offence shall constitute grounds whereby the Commissioner may apply to the Court under section 123 (g) for the winding-up of that insurer.

(3) The amount of any levy or penalty payable under this Act shall not be abated by reason only of the conviction of the insurer liable for the payment, or by reason of any payment of a ne imposed by the court on the insurer for an offence under subsection (1).

Examination and 197D.

(1) The Commissioner may, for the purpose of obtaining production of full information in respect of the levy liability of any insurer, require documents.

the production of such records, books of account, statements and other 12 of 1987, s.

10, documents as he may consider necessary for examination and retention 4 of 1994, s.

63, for such period as may be reasonable for the purpose.

13 of 1995, s.

94, 11 of 2006, s.

26.

(2) The Commissioner may require any person to attend at such time and place as may be specied for the purpose of being examined in respect of any matter or transaction appearing to be relevant to the levy liability of any insurer.

Rev.

2012] Insurance CAP.

487 137 197E.

(1) The Minister may make regulations, prescribing all Regulations under matters which are required or permitted under Part XXA and Part Part XXA and XXB to be prescribed, or which in his opinion are necessary, desirable PXXB.

or convenient to be prescribed, for giving full effect to this Part of the 11 of 2006, s.

26.

Act.

197F197K (Repealed by 11 of 2006, s.

26.).

Part xxIsuPPlementary ProVIsIons 198.

(1) A notice, direction or document issued under the Act Service of notice on may be served by delivering it or sending it by registered post to the registered person.

address mentioned in an application registration under this Act as the principal place of business of that person or, if the Commissioner has been notied of a change of address, to the new address.

(2) A notice, direction or document served by post in accordance with the provisions of subsection (1) shall be to have been served on the date on which it would have been delivered in the ordinary course of post.

199.

A document which is by this Act required to be sent to a policy Service of notice on holder may be addressed and sent by post to the person to whom notices policy holder.

in respect of the policy are usually sent, and a document so addressed and sent shall be deemed, unless the contrary is proved, to have been received by the policy holder in the normal course of transit: Provided that where a person claiming an interest under a policy has given notice in writing thereof to the insurer, a copy of any such document shall also be sent to that person at the address specied by him in his notice.

200.

Where this Act has effect with respect to an amount or value Conversion of in relation to a person and in relation to a particular day and that amount currency.

or value is in a currency other than Kenya currency, the amount or value shall be converted into Kenya currency at the rate of exchange that is, at the close of business on that day, the telegraphic transfer buying rate of exchange of the principal banker of the person or, if there is no such rate on that day, at the telegraphic transfer buying rate of exchange of the banker at the close of business on the last day on which there was such a rate.

201.

(1) Subject to this section and notwithstanding the provisions Consent of of any other written law or any agreement, on or after the appointed Commissioner date no remittance or transfer of any sum of money or securities out required for of Kenya in excess of the amounts from time to time prescribed by the insurance.

Central Bank of Kenya, in respect of or by way of premium, reserve 12 of 1994, s.

36.

CAP138.

487 Insurance [Rev.

2012 value, claim, management expense, prot surplus, investment income, or other payment or sum of money, which directly or indirectly arises out of insurance business, shall be made without the prior written approval of the Commissioner.

(2) An application for the approval of the Commissioner under this section shall be in the prescribed form and contain the prescribed particulars.

(3) Approval granted by the Commissioner under this section shall not exempt a bank or any person from compliance with any other law regulating the remittance or transfer of money or securities out of Kenya.

202.

Where a document is by this Act required to be printed, the Printing of Commissioner may permit it to be typewritten, or to be reproduced by documents.

any mechanical means approved by him.

Settlement claims.

203.

(1) Where the claimant has submitted all the relevant 11 of 2006, s.

27, documents, every insurer shall, in respect of claims arising out of 7 of 2007, Sch., policies of insurance issued by it 8 of 2008, s.

64, 8 of 2009, s.

50.

(a) admit or deny liability; (b) determine the amount due; (c) establish the identity of the claimant; and (d) pay the claim, within ninety days of the date of the reporting of the claim or where the determination of liability is by a court, within ninety days of such determination: Provided that if, for any reason, the insurer is unable to pay the claim within the period specied in this subsection, the insurer shall apply to the Commissioner for extension of time, and the Commissioner may grant such extension for a period not exceeding thirty days.

(2) Where an assessment of claim has been carried out, a copy of the assessment report shall be made available to the claimant.

(3) Where the amount of a claim which is due under subsection (1) remains unpaid on expiry of the period prescribed in that subsection, or any extension thereof under subsection (1), a penalty equal to ve percent of the unpaid amount shall forthwith become due and payable.

Rev.

2012] Insurance CAP.

487 139 (4) A penalty due under subsection (3) shall be recoverable as though it were a penalty interest charge payable to the Policy Holders Compensation Fund Board under section 179, and shall be recovered by the Board in accordance with that section.

(5) If an insurer fails to pay the amount of a claim and any penalty thereon due in accordance with this section, the insurer shall be deemed to be unable to pay his debts under section 123 and liable to be wound up in accordance with that section.

204.

The Attorney-General may, pursuant to the provisions of the Criminal Procedure Code, appoint public prosecutors for the purposes Appointment of of cases arising under this Act.

public prosecutors.

8 of 2008, s.

64.

Cap 75.

FIRST SCHEDULE (S.

3C) PROVISIONS AS TO THE CONDUCT OF BUSINESS 11 of 2006, s.

28, AND AFFAIRS OF THE BOARD 8 of 2009, s.

51.

1.

(1) A member of the Board other than an ex ofcio member Tenure of ofce.

shall, subject to the provisions of this Schedule, hold ofce for a period not exceeding three years, on such terms and conditions as may be specied in the instrument of appointment, but shall be eligible for reappointment one further term of not more than three years.

(2) The members of the Board shall be appointed at different times so that the respective expiry dates of their terms fall at different times.

2.

A member other than an ex ofcio member may Vacation of Ofce.

(a) at any time resign from ofce by notice in writing to the Minister; (b) be removed from ofce by the Minister if the member (i) has been absent from three consecutive meetings of the Board without permission from the Chairman; or (ii) is adjudged bankrupt or enters into a composition scheme or arrangement with his creditors; CAP140.

487 Insurance [Rev.

2012 (iii) is convicted of an offence involving dishonesty, fraud or moral turpitude; (iv) is convicted of a criminal offence and sentenced to im- prisonment for a term exceeding six months or to a ne exceeding ten thousand shillings; (v) is incapacitated by prolonged physical or mental illness; or (vi) is otherwise unable or unt to discharge his functions.

Meetings.

3.

(1) The Board shall meet not less than four times in every nancial year and not more than four months shall elapse between the date of one meeting and the date of the next meeting.

(2) Unless three-quarters of the total members of the Board otherwise agree, at least fourteen days written notice of every meeting of the Board shall be given to every member of the Board.

(3) The quorum for the conduct of the business of the Board shall be ve (5) members excluding the Commissioner of Insurance, of whom at least two shall be from amongst the members of the Board appointed under paragraph (h) of section 3B.

(4) The Chairman shall preside at every meeting of the Board at which he is present but in his absence, the members present shall elect one of their number who shall, with respect to that meeting and the business transacted thereat, have all the powers of the chairman.

(5) Unless a unanimous decision is reached a decision on any matter before the Board shall be by a majority of votes of the members present and in the case of an equality of votes, the Chairman or the person presiding shall have a casting vote.

(6) Subject to paragraph (3), no proceedings of the Board shall be invalid by reason only of a vacancy among the members thereof.

(7) Subject to the provisions of this Schedule, the Board may determine its own procedure and the procedure for any committee of the Board and for the attendance of any other persons at its meetings and may make standing orders in respect thereof.

4.

(1) If a member is directly or indirectly interested in any Disclosure of contract, proposed contract or other matter before the Board and is interest.

present at a meeting of the Board at which the contract, proposed contract or other matter is the subject of consideration, he shall, at the meeting Rev.

2012] Insurance CAP.

487 141 and as soon as practicable after the commencement thereof, disclose the fact and shall not take part in the consideration or discussion of, or vote on any questions with respect to the contract or other matter, or be counted in the quorum of the meeting during consideration of the matter: Provided that if the majority of the members present are of the opinion that the experience or expertise of that member is vital to the deliberations of the meeting, the Board may permit the member to participate in the deliberations subject to such restrictions as it may impose.

(2) A disclosure of interest made under this paragraph shall be recorded in the minutes of the meeting at which it is made.

5.

The afxing of the common seal of the Authority shall be authenticated by the signatures of the Chairman and the Commissioner, The common seal.

and any document required by law to be made under seal and all decisions of the Board may be authenticated by the signatures of the Chairman and the Commissioner: Provided that the Board shall, in the absence of either the Chairman or the Commissioner, in any particular matter nominate one member to authenticate the seal of the Board on behalf of either the Chairman or the Commissioner.

6.

Any contract or instrument which, if entered into or executed by a person other than a body corporate, would not require to be under Contracts and seal, may be entered into or executed on behalf of the Authority by Instruments.

any person generally or specially authorised by the Authority for that purpose.

7.

The Board shall cause minutes of all proceedings of meetings of the Board to be entered in books kept for that purpose.

Minutes.

SECOND SCHEDULE (ss.

23 and 28) MINIMUM CAPITAL REQUIREMENTS 12 of 1994, s.

38, L.N.

76/1999, 1.

No person shall be registered as insurer unless L.N.

97/2007.

(a) in the case of an insurer dealing with general insurance business, its paid-up capital is at least three hundred million CAP142.

487 Insurance [Rev.

2012 Kenya shillings; (b) in the case of an insurer dealing with life insurance business, its paid-up capital is at least one hundred and fty million Kenya shillings; (c) in the case of an insurer dealing with composite insurance business, the paid-up capital is at least four hundred and fty million Kenya shillings.

MINIMUM ASSETS IN KENYA No person shall be registered as an insurer unless (a) in the case of an insurer, its admitted assets in Kenya are worth not less than twenty million Kenya shillings; or (b) in the case of a re-insurer, its admitted assets in Kenya are worth not less than two hundred million shillings.

Rev.

2012] Insurance CAP.

487 143 SUBSIDIARY LEGISLATION L.N.

312/1986, L.N.

52/1987, L.N.

542/1988, Regulations Under Section 180 L.N.

180/1992, L.N.

124/1994, L.N.

189/1994, L.N.

372/1995, L.N.

87/1996, L.N.

169/1998, L.N.

75/1999, THE INSURANCE REGULATIONS L.N.

76/1999, L.N.

172/1999, L.N.

108/2002, L.N.

91/2003, L.N.

40/2004, L.N.

64/2006, L.N.

65/2006, L.N.

99/2006, L.N.

2/2007, Part IPrelImInary L.N.

135/2007, L.N.

97/2009, L.N.

85/2010, L.N.

108/2002, L.N.

51/2011.

1.

These Regulations may be cited as the Insurance Regulations.

Citation.

2.

These Regulations shall apply to all members of the insurance industry, Applicability.

mutatis mutandis, unless otherwise specied.

3.

(1) In these Regulations Interpretation.

Kenya citizen means an individual, being a natural person, who is a citizen of Kenya; Kenya company means a company, incorporated under the Companies Cap.

486.

Act whose shares are wholly owned by Kenya citizens; Kenya partnership means a partnership whose partners are all Kenya citizens.

(2) For the purposes of these Regulations and the management of the insurance industry the classes and sub-classes of insurance business shall be serialized according to the serial numbers specied in these Regulations.

Excluded business.

4.

For the purposes of the denition of insurance business in section 2 of the Act the following are declared not to be insurance businesses for the purposes of the Act (a) business undertaken by a person being a carrier, carriers agent, forwarding agent, wharnger, warehouse man or shipping agent, relating only to his liability in respect of goods belonging to another CAP144.

487 Insurance [Rev.

2012 [Subsidiary] person and in his possession or under his possession or under his control for the purpose of carriage, storage or sale of those goods; (b) business undertaken by a person, being an inn-keeper or lodging, house-keeper relating only to his liability in respect of goods belonging to another person and in the possession or under the control of a guest at the inn or lodging house of which the rst- mentioned person is the inn-keeper or lodging house-keeper for safe custody.

Part IIregIstratIon of Insurers Insurers application 5.

The application for registration or renewal of registration as an insurer for registration under section 30 of the Act, shall be submitted in Form No.

INS.

30-1 in the and renewal of First Schedule together with all the information required to be submitted in the registration.

appendices to that form specied in that Schedule.

L.N.

189/1994.

6.

The fee for registration as an insurer under section 30 shall be Registration fees.

(i) in the case of an insurer, one hundred and fty thousand shillings; and (ii) in the case of re-insurer, two hundred and fty thousand shillings, and the same fee shall be payable for renewal registration under section 188 (2).

Statements to be 7.

For the purpose of section 30 (k) of the Act, every insurer shall, at submitted under the time of rst making application for registration under one or more of the section 30 (k) of the classes of insurance business prescribed under regulations 9 and 10, lodge with Act.

the Commissioner the following statements (a) a photo copy of the certicate of incorporation; (b) in the case of an insurer who has not transacted insurance business prior to making the application or where authorization is sought to transact a class of business not transacted before, a copy of the feasibility study report carried out in this regard, showing estimates of premium, expenses and claims for each of the rst three nancial years following the year in which the application is made, separately on a year by year basis and separately for each such year on both optimistic and pessimistic bases and such feasibility study report shall contain the following information (i) estimates relating to (A) premiums both gross and net of reinsurance and broken down between business in Kenya and elsewhere; and (B) claims, after all reinsurance recoveries; Rev.

2012] Insurance CAP.

487 145 [Subsidiary] (ii) a forecast balance sheet; (iii) estimates relating to the nancial resources to cover underwrit- ing liabilities and the margin of solvency; (iv) in the case of long-term insurance business, the number of contracts, and the total sums assured or amounts of annuity per annum expected to be issued; (c) the sources of business (for example, insurance brokers, agents, own employees or direct selling) and the approximate percentage expected from each source; (d) a summary (that is to say a treaty slip) of reinsurance treaties arranged for each classof business containing all the terms and conditions; (e) copies or drafts of any agreements with persons (other than employees of the insurer) who will manage the business of the insurer; (f) copies or drafts of any standard agreements which the insurer may have with brokers or agents; (g) in the case of long-term insurance business, a certicate by an actuary, supported by calculations or projections by the actuary, that he considers the nancing of the insurer to be sufcient to cover both technical reserves and the required margin of solvency during the rst three nancial years following the nancial year in which application is made; (h) in the case of an insurer who has not transacted insurance business prior to making the application or where authorization is sought to transact a class of business not transacted before, the estimated costs of installing the administrative services and organisation for securing business, and the nancial resources intended to cover those costs; (i) accounts, statements and reports laid before the shareholders at the last three annual general meetings or, if less than three annual general meetings have been held, the accounts, statements and reports laid before the annual general meetings which have been held and the minutes of the annual general meetings shall also be lodged; (j) in the case of an insurer who was carrying on or transacting long-term insurance business immediately prior to the date of commencement of the Act, copies of the last three valuation reports of the actuary.

CAP146.

487 Insurance [Rev.

2012 [Subsidiary] Deposits for Insurers 7A.

For the purposes of section 32 of the Act, deposits required to be kept Registration.

with the Central Bank of Kenya shall be under lien in favour of the Insurance Regulatory Authority.

Part IIIadmItted assets and admItted lIabIlItIes Admitted assets and 8.

(1) For the purposes of section 41 (9) of the Act the value and extent admitted liabilities.

of the assets and liabilities shall be determined in accordance with the provisions of Part A of the Second Schedule.

(2) In the event of any dispute as to the valuation of any asset or liability, the Commissioner may refer the dispute to a panel of three or ve persons at least one of whom shall be a member of the Institute of Surveyors of Kenya or Cap.

486.

an actuary as dened in section 2 of the Act or a person qualied to be appointed an auditor under section 161 of the Companies Act; and the Commissioner may direct that the costs or any part of the costs of such a dispute settlement process shall be borne by such party or parties as he may specify.

Part IVaCCounts, balanCe sheets, audIt and aCtuarIal InVestIgatIons Classes of long-term 9.

(1) An insurer carrying on long-term insurance business, shall maintain insurance business separate accounts in respect of the following classes of long-term insurance in respect of which business: separate accounts to be maintained.

long-term InsuranCe busIness Classes of busIness Serial No.

Brief Description of Classes 31 Bond investment business 32 Industrial life assurance business 33 Ordinary life assurance business 34 Superannuation business (2) For the purposes of these Regulations superannuation business means life assurance business, being business of, or in relation to, the issuing of or the undertaking of liability under superannuation, group life and permanent health insurance policies (a) that is vested in the trustees of a fund established or maintained by a person, being a fund the terms and conditions applicable to which provide for Rev.

2012] Insurance CAP.

487 147 (i) the payment of contributions to the fund by that person; and [Subsidiary] (ii) payments being made from the fund, on account of injury, sick- ness, retirement or death of the employees of that person or of a company in which that person has a controlling interest; or (b) that was (i) effected for the purposes of a superannuation or retirement scheme; or (ii) accepted by the person maintaining such a scheme for the purpose of the scheme.

10.

An insurer carrying on general insurance business shall maintain Classes of general separate accounts in respect of the classes of business listed in Part A of the insurance business Third Schedule and dened for the purposes of these Regulations in Part B of in respect of which that Schedule.

separate accounts to be maintained.

11.

(1) For the purposes of section 54 of the Act, the forms of accounts Forms of accounts.

shall be the following forms set out in Part C of the Third Schedule (a) the general insurance business revenue account, Form No.

INS.

54-1; (b) the long-term insurance business revenue account, Form No.

INS.

54-2; (c) the additional statement in respect of general insurance business, Form No.

INS.

54-3; (d) the prot and loss account, Form No.

INS.

54-4; (e) the balance sheet, Form No.

INS.

54-5.

(2) The forms shall be prepared in accordance with the directions specied in Part D of the Third Schedule and such other directions as the Commissioner may from time to time in writing issue to members of the insurance industry.

12.

For the purposes of section 57 (1) of the Act, the actuarial abstracts Actuarial abstracts.

and statements in respect of long-term insurance business shall be prepared in accordance with the provisions of the Fourth Schedule.

13.

For the purposes of section 57 (3) of the Act, the statement required Statements of of an insurer following an investigation under section 57 (1) of the Act shall be long-term insurance prepared in accordance with the provisions of the Fifth Schedule.

business.

14.

For the purposes of section 57 (5) of the Act, the value of assets and Actuarial valuation the amount of liabilities for purposes of an actuarial investigation shall, subject of liabilities.

to section 58 of the Act, be determined in accordance with the provisions of CAP148.

487 Insurance [Rev.

2012 [Subsidiary] Minimum basis.

the Sixth Schedule.

15.

For the purposes of section 58 (3) of the Act, the calculation on the minimum basis of the value of liability of a statutory fund in respect of its policies, shall be according to the provisions of the Seventh Schedule.

Actuarys certicate.

16.

For the purposes of section 58 (5) (c) of the Act, an actuarys certicate shall be in form set out in the Eighth Schedule.

Annual returns: 17.

For the purposes of section 59 of the Act, every insurer carrying long-term insurance on long-term insurance business shall, within six months after the end of the business.

period to which they relate, lodge with the Commissioner, in respect of every L.N.

108/2002.

nancial year (a) a statement of admitted assets and admitted liabilities in Form INS.

41-1 in the Second Schedule signed by the principal ofcer and by auditor on a quarterly basis, not later than forty-ve days after the end of the quarter to which it relates; and (b) the following statements in the forms set out in the Ninth Schedule signed by the principal ofcer and also by an auditor in the case of those under (i), (ii), (iii), (iv) and (v) (i) statement of premium income, Form No.

INS.

59-14; (ii) statement of incurred claims, Form No.

INS.

59-3A; (iii) statement of commission and management expenses, Form No.

INS.

59-5; (iv) particulars of inward and outward re-insurance treaties, Form No.

INS.

59-6; (v) particulars of brokers, re-insurers and re-insured under inward and outward reinsurance treaties, Form No.

INS.

59-7; (vi) particulars of insurance business not covered by any re- insurance arrangement, Form INS.

59-8; (vii) particulars of inward and outward reinsurance treaties; (viii) statement of commission Form No.

INS.

59-10A; (ix) statement of long-term insurance business, Form No.

INS.

59-11; (x) statement of movement in long-term insurance business, Form No.

INS.

59-12.

Annual returns: 18.

For the purposes of section 59 of the Act, every insurer carrying general insurance on general insurance business shall, within six months after the end of the business.

period to which they relate, lodge with the Commissioner, in respect of every L.N.

108/2002.

Rev.

2012] Insurance CAP.

487 149 [Subsidiary] nancial year (a) a statement of admitted assets and admitted liabilities in Form INS.

41-1 in the Second Schedule signed by the principal ofcer and an auditor on a quarterly basis, not later than forty-ve days after the end of the quarter to which it relates; and (b) the following statements in the forms set out in the Ninth Schedule, signed by the principal ofcer and also by an auditor in the case of the statements under (i), (ii), (iii), (iv), (v), (vi) and (vii) (i) statement of premium income, Form No.

INS.

59-1B; (ii) statement of incurred claims in respect of incidents occurring in previous years, Form No.

INS.

59-2; (iii) statement of incurred claims in respect of incidents occurring in the current year and total incurred claims, Form No.

INS.

59-3B; (iv) statement of underwriting balances, Form No.

INS.

59-4; (v) statement of commission and management expenses, Form No.

INS.

59-5; (vi) particulars of inward and outward reinsurance treaties, Form No.

INS.

59-6; (vii) particulars of brokers, re-insurers and re-insured under inward and outward reinsurance treaties, Form No.

INS.

59-7; (viii) particulars of insurance business not covered by any reinsur- ance arrangement, Form No.

INS.

59-8; (ix) statement of reinsurance premium, Form No.

INS.

59-9B; (x) statement of reinsurance commission, Form No.

INS.

59- 10B.

19.

(1) The statements required under regulations 17 and 18 shall Annual returns: be submitted separately in respect of Kenya business and outside Kenya supplementary business.

provisions.

(2) In case an insurer does not have any information to submit in respect of any of the classes of business under regulations 17 and 18 the statements required shall be submitted indicating that the insurer has no information to submit.

(3) Class of business and sub-class of business wherever shown in the statements required to be furnished under regulations 17 and 18 are those specied in regulation 9 in respect of long-term insurance business and in Part A of the Third Schedule in respect of general insurance business.

CAP150.

487 Insurance [Rev.

2012 [Subsidiary] Authentication 20.

(1) The four copies of the accounts, balance sheets, certicates, abstracts, returns or statements required to be deposited with the Commissioner and certication under section 61 (1) of the Act shall, in addition to the signatures required of accounts and statements.

under section 60 of the Act, have printed thereon by the insurer a certicate of L.N.

85/2010.

authentication signed by the principal ofcer and the person who prepared the account, balance sheet, certicate, abstract, return or statement in this form: CERTIFIED ON THE.

, 19.

TO BE AN AUTHENTIC COPY FOR THE PURPOSES OF SECTION 61 OF THE INSURANCE ACT, 1984.

(2) The name of the person signing any statement, document, return, abstract, report, submitted to the Commissioner under the provisions of the Act or these Regulations shall be printed just below the signature and any one signing in the name of a rm shall print his own name and also that of his rm below the signature.

(3) Subject to such conditions as a Commissioner may prescribe, insurance formalities or submission of documents under this regulation may be done through the use of information technology.

Part Vmanagement and exPenses Management 21.

(1) For the purposes of section 70 (1) of the Act the limits of expenses.

management expenses shall be as set out in Part A of the Tenth Schedule.

(2) Every insurer shall submit statements in forms Nos.

INS.

70-1, INS.

70-2, INS.

70-3, INS.

70-3A, INS.

70-4 set out in part B of the Tenth Schedule as may be applicable, within six months of the period to which they relate, duly certied by the principal ofcer.

Restriction on 22.

For the purposes of section 73 (2) of the Act, the maximum rates commission.

of brokerage, commission, payable by an insurer shall be those specied in L.N.

108/2002.

the Eleventh Schedule in respect of the classes of business specied in that schedule.

Part VIPolICy terms Exemption from the 23.

The following categories of contracts shall be exempt from the provision regarding operation of section 78 of the Act, namely: avoidance of (a) contracts of insurance covering the liability under the Insurance contracts of unlimited (Motor Vehicles Third Party Risks) Act; amounts.

Cap.

405.

(b) contracts of insurance covering the liability of an employer to the Rev.

2012] Insurance CAP.

487 151 employee under common law.

[Subsidiary] 24.

For the purposes of section 88 (1) of the Act, the rules on paid-up Paid up policies.

policies shall be those specied in the Twelfth Schedule.

25.

For the purposes of section 89 of the Act, the surrender value of a Surrender values.

policy shall be calculated in accordance with the rules set out in the Thirteenth Schedule.

26.

For the purposes of section 90 (2) of the Act the prescribed terms shall Payment of be terms under which the amount of interest chargeable in respect of an overdue interest on overdue premium would be an amount calculated at a rate of interest not exceeding ten premiums.

per centum per annum on the overdue premium compounded annually.

27.

For the purposes of section 91 (4) of the Act the prescribed rules Paid up industrial life shall be those set out in the Twelfth Schedule.

policies.

28.

In accordance with subsection (2) of section 93 of the Act, it is Certain policies to declared that the provisions of sections 88 to 92 (inclusive) of the Act shall which sections 88-92 apply in respect of each of the classes of policies specied in this regulation, do not apply.

subject to the modications declared in the paragraph of this regulation in which that class is specied (a) Family Income Policies and Policies which provide other additional benets on death within a specied term If a policy provides income or other additional life insurance benets so that the amount payable (exclusive of bonuses) in the event of death within a specied term dating from the commencement of the policy exceeds the amount payable (exclusive of bonuses) in the event of death or survival after the expiry of the specied term (which latter amount is hereinafter referred to as the basic sum insured), the paid-up policy to which the policy owner is entitled shall be payable on the same contingencies as the basic sum insured only, and shall not carry such additional benets.

(b) Policies which include certain contingent additional benets If a policy includes provision for a benet payable in an event other than death or survival, or a benet payable in the event of death by accident or in the event of a specied sickness only (either or both of which benets are hereinafter referred to as additional benets), the paid-up policy to which the policy owner shall be entitled shall be calculated in accordance with the rules set out in the Twelfth Schedule; and for the purpose of that calculation the additional benets shall be ignored, and the paid-up policy shall not provide any part of the additional benets.

(c) Option Policies If a policy contains provision for the contract thereunder to be varied CAP152.

487 Insurance [Rev.

2012 [Subsidiary] at the option of the owner of the policy on a specied date or on the happening of a specied event and the policy owner becomes entitled to a paid-up policy before that option has been exercised, the paid-up policy to which the policy owner shall be entitled shall be that to which he would be entitled if the policy did not include provision for that optional variation.

(d) Altered Ordinary Life Policies In cases where, since the issue of any ordinary policy, the contract thereunder has been varied at the request of the policy owner in such a manner that either the date upon which the sum insured becomes payable, or the term during which premium payments are to be made, or both, have been altered, the paid-up value of the policy shall be calculated according to the rules determined for the purpose by the insurers actuary.

(e) Policies providing for endowment insurance payable in instalments depending on survival with level premiums until the last instalment is paid If an endowment insurance policy provides for payment of the sum assured by instalments depending on survival and full sum assured or any unpaid balance at death, premiums being payable at a level rate until the nal balance of the sum insured has been paid, the paid-up policy value of such a policy shall be calculated according to rule 2 instead of rule 1 of the rules set out in the Twelfth Schedule: Provided that (i) if, according to the practice of the insurer, on the policy being made paid up, the paid-up amount is payable in one lumpsum on death or at maturity instead of instalments as provided in the original contract, this factor shall be allowed for in the calculation of the paid-up value of the policy under rule 2 of the Twelfth Schedule; and (ii) for the actual calculation of paid-up values of policies referred to in this paragraph an insurer may use, with the approval of the Commissioner, working rules framed by the insurers actuary consistent with the provision of this paragraph.

(f) Paid-up Policies Where a policy has been rendered paid-up (whether by the grant of a paid-up policy as required by the Insurance Act or otherwise) and a calculation of the surrender value of the policy is subsequently required to be made, the calculation shall be made according to the rules set out in the Thirteenth Schedule, and the amount of the paid-up policy of which the present value is to be found in terms of rule 1 of those rules shall be the actual amount of the paid-up policy.

Part VIInomInatIons Rev.

2012] Insurance CAP.

487 153 [Subsidiary] 29.

For the purposes of the proviso to section 111 (1) of the Act, the Nomination of appointment of a person to receive the money secured by a policy in the event minors.

of the death of the holder of a policy during the minority of the nominee shall be in the form set out in the Fourteenth Schedule.

30.

An insurer may charge a policy holder ten shillings for registering Fee for registering, a nomination or its cancellation or change pursuant to section 111 (3) of the cancelling or Act.

changing a Part VIIIClaIms on small lIfe PolICIes nomination.

31.

The fee to be charged and collected for an adjudication under section Fee for adjudication.

112 of the Act shall be two per centum of the sum assured of the policy in dispute or one hundred shillings, whichever is the greater amount.

Part Ixmandatory reInsuranCe CessIons 32.

For the purposes of section 145 of the Act, the proportions of Mandatory cessions.

business which shall be ceded to the Corporation by insurers, the manner of cessions and the terms and conditions applicable shall be those set out in the Fifteenth Schedule for the various classes of insurance business specied in that schedule.

33.

Payment by insurers to the Corporation in respect of reinsurance Payment of effected under Part XIV of the Act shall made within the periods of payment reinsurance cessions.

specied in the Fifteenth Schedule.

Part xIntermedIarIes, ClaIms settlIng agents, InsuranCe surVeyors, loss adjusters, loss assessors and rIsK managers 34.

(1) The forms set out in the Sixteenth Schedule shall be used Forms of application by brokers, agents, risk managers, loss assessors, loss adjusters, insurance for registration surveyors and claims settling agents when applying for registration under the and renewal of Act and shall be submitted together with the appendices thereto prescribed in registration of that Schedule.

intermediaries, etc.

L.N.

52/1987.

(2) For the purposes of registration and renewal of registration of insurers under sections 31 and 188 of the Act and the registration and renewal of registration of agents, brokers, risk managers, loss assessors, loss adjusters, insurance surveyors and claims settling agents under sections 153 and 188 of the Act the registration certicates to be issued on registration shall be in Forms set out in the Twenty-Second Schedule.

35.

For the purposes of section 151 (1) (a) of the Act, the policy of Policy of professional professional indemnity insurance to be taken out by a broker shall be as indemnity for a prescribed in the Seventeenth Schedule.

broker.

CAP154.

487 Insurance [Rev.

2012 [Subsidiary] 36.

For the purposes of section 151 (1) (c), every agent, broker, claims Statement of settling agent, insurance surveyor, loss adjuster, loss assessor and risk manager, business.

shall submit a statement of business in the appropriate form prescribed in the Eighteenth Schedule and in accordance with the notes thereto.

Fees payable.

37.

The fees for registration and renewal of registration under sections L.N.

189/1994.

151 (1) (d) and 188 (2) of the Act shall be as follows: KSh.

Insurance broker.

10,000 Risk manager.

3,000 Loss assessor.

3,000 Loss adjuster 3,000 Insurance surveyor.

3,000 Claims settling agent 3,000 Insurance agent.

1,000 Corporate insurance agent.

1,000 Other documents.

38.

For the purposes of section 151 (1) (e) of the Act, a broker who is already carrying on business on the appointed date shall, at the time of the application for the rst registration under the Act, submit (a) an audited prot and loss account; (b) an audited balance sheet; (c) a report from an auditor as to whether (i) proper accounting records have been kept; (ii) proper returns adequate for audit have been received; (iii) the balance sheet and prot and loss accounts are in accordance with the accounting records: Provided that (i) if the auditor is unable to make a positive opinion in respect of the matters specied in this paragraph he shall state that fact in his report and shall qualify the report if he fails to obtain all the information and explanations which are necessary for the Rev.

2012] Insurance CAP.

487 155 purposes of the audit; and [Subsidiary] (ii) if the broker carries on any other business, he shall attach a supplementary statement (A) showing the total revenue of the business divided between revenue directly derived from insurance broking and all other revenue and stating the nature of each type of business carried on; (B) classifying expenditure and grouping it under appropriate headings; (C) showing the total brokerage income contained in the accounts unless this gure is already stated in the accounts.

39.

(1) For the purposes of section 153 (1) of the Act, the form of Bank guarantee for guarantee which may be required of a broker by the Authority shall be in the brokers registration.

form of a bank guarantee as set out in Form 1531 in the Nineteenth Schedule L.N.

124/1994, or in the form of a two-year Government bond held by the Authority, and the L.N.

75/1999, minimum amount of the guarantee shall be, at the time of rst registration of L.N.

108/2002, the broker and at the time of subsequent renewals, three million shillings.

L.N.

65/2006, Provided that a broker who is registered before the commencement of L.N.

2/2007, this provision shall provide the guarantee referred to herein within a period of L.N.

97/2009, eighteen months from the date of such commencement.

L.N.

85/2010.

40.

For the purposes of section 155 of the Act, every corporate person Returns by corporate registered under Part XV of the Act, shall furnish to the Commissioner, within persons under the four months after the end of the period to which they relate, such audited Act.

accounts and statements together with the auditors report as are required to be L.N.

85/2010.

prepared under the Companies Act and every broker shall, in addition, furnish, Cap.

486.

within sixty days from the end of each half year, audited statements showing the total amount of premium due from the broker to all insurers in Kenya remaining outstanding as at 30th June and 31st December of every year in respect of risks placed with the insurers before the respective dates and also separately, in respect of risks placed more than sixty days prior to the respective dates, in Form No.

INS.

1531 in the Nineteenth Schedule.

Part xIadVanCe Payment of PremIum 41.

For the purposes of section 156 (1) of the Act, a risk in respect of Advance payment of a policy may be assumed before the premium payable in respect thereof is premium.

received L.N.

91/2003.

(a) if the entire amount of premium is guaranteed to be paid by a bank licensed under the Banking Act; Cap.

488.

(b) if an advance deposit is made with the insurer to the credit of the insured sufcient to cover the payment of the entire amount of the premium together with the premium, if any, due from the insured in respect of any other risk already assumed against such deposit, such deposit being agreed to be adjusted towards the premium.

CAP156.

487 Insurance [Rev.

2012 [Subsidiary] Despatch of 42.

For the purposes of section 156 (4) of the Act, the premium collected premium.

by an agent or a cheque received by him shall be deposited with or despatched L.N.

91/2003.

to the insurer immediately upon the receipt thereof.

Relaxations.

43.

For the purposes of section 156 (5) of the Act, in respect of the categories of insurance policies mentioned hereunder the provisions of subsection (1) of section 156 of the Act and regulation 41 shall stand relaxed to the extent and in the manner mentioned in respect of each category of policy, subject to the conditions mentioned therein (a) Policies under Sickness Insurance Scheme Premiums on such policies may be accepted in instalments provided that the instalment covering a particular period shall be received on or before the date of commencement of the period.

(b) Declaration Policies Risks in respect of such policies may be insured if at least the premium calculated on 75 per centum of the sum insured has been received before assumption of the risk.

(c) Policies issued on the basis of adjustable premiums Risk in respect of policies issued on the basis of adjustable premium such as workmens compensation, cash in transit, and others, may be assumed on receipt of provisional premiums based on a fair estimate.

(d) Annual insurances connected with aircraft hulls and marine hulls Facilities for delayed payment of premium on such policies, or the payment of premiums by means of instalments not exceeding four in number and on the basis of an approved clause, may be allowed at the discretion of the insurer, provided that such clause is endorsed on the policy.

(e) Short period covers in respect of insurance connected with aircraft hulls and marine hulls Short period covers may be granted on such risks on a held covered basis, subject to the condition that the premium or additional premium in respect of risks assumed in a calendar month shall be paid by the end of the next calendar month.

(f) Policies issued for long term In the case of policies issued for long term, such as contract performance bonds or guarantees, contractors all risks policies, Rev.

2012] Insurance CAP.

487 157 machinery erection policies and the like, the premium may be [Subsidiary] staggered as necessary according to custom, over the period of the cover, provided that the rst instalment is higher than any other instalment by at least ve per centum of the total premiums payable and each instalment is paid in advance, but where the premium is payable by declaration, it may be paid within fteen days from the effective date of such declaration.

(g) Schedule and Consequential Loss Policies In such cases a provisional amount towards the premium shall be collected before the date of inception or renewal of risk on the basis of the previous years premium.

(h) Marine Covers other than hulls (i) In the case of inland shipments and transit risks, risk may be assumed under open policies in respect of seasonal crops such as tea, on the payment of a provisional premium based on a fair estimate; (ii) in the case of exports overseas, risk may be assumed subject to the condition that the premium shall be paid within fteen days from the date of sailing of the overseas vessel; (iii) in the case of imports, risk may be assumed subject to the con- dition that the premium shall be paid within fteen days of the receipt of declaration in Kenya from the insurers or insureds representative overseas: Provided that the relaxations under subparagraphs (ii) and (iii) shall apply to marine cover notes only and not to marine policies.

(i) Policies relating to co-insurances The premiums shall be deemed to have been duly paid if paid on the full insurance to any one of the co-insurers.

(j) Policies of reinsurance Risks may be assumed without payment of premium in advance in insurances accepted under automatic reinsurance contracts.

Part xIIgeneral ProVIsIons 44.

For the purposes of section 177 (2) of the Act the fee per page of a document deposited with the Commissioner copied and furnished shall be Folio copies.

two shillings.

45.

The fee for inspection of a register under section 185 of the Act shall Inspection fees.

be ten shillings.

CAP158.

487 Insurance [Rev.

2012 [Subsidiary] 46.

The fee for a duplicate certicate under section 189 (2) of the Act Fees for duplicate shall be ve hundred shillings.

certicates.

Part xIIIsuPPlementary ProVIsIons 47.

An application for the Commissioners approval under section 201 Application for of the Act to remit money or securities out of Kenya shall be made in Form No.

remittance.

INS.

2011 in the Twentieth Schedule and every insurer shall also furnish to the Commissioner a statement in respect of reinsurance business ceded abroad and reinsurance in Form No.

INS.

2012 in the Twentieth Schedule showing, separately business accepted from abroad and also separately in respect of long-term insurance business reinsurance and general insurance business reinsurances, the total amount (in equivalent Kenya shillings remitted abroad and the total amount of recoveries (in equivalent Kenya shillings) made from foreign reinsurers and insurers during each of the quarters ending on the last day of March, June, September and December within one month from the close of the quarter to which it relates; and every such statement shall be signed by the principal ofcer of the insurer.

48.

For the purposes of section 203 of the Act, an insurer shall furnish Claims.

the following statements to the Commissioner duly certied by the principal ofcer (i) a statement in Form No.

INS.

2031A in the Twenty-First Sched- ule in respect of the long-term insurance business within three months after the end of the period to which it relates; and (ii) a statement in Form No.

INS.

2031B in the Twenty-First Sched- ule in respect of the general insurance business within three months after the end of the period to which it relates; and (iii) a statement in Form No.

INS.

2032 in the Twenty-First Sched- ule in respect of the long-term and general insurance business within 15 days after the end of the period to which it relates.

Manner of payment 49.

The fees payable by the members of the insurance industry for of fees.

registration or renewal of registration under the Act and the Regulations shall L.N.

97/2009, be paid to The Insurance Regulatory Authority.

L.N.

85/2010.

50.

A reference in these Regulations to a Schedule shall be a reference to Specied the particular Schedule set out in the Schedules to the Insurance Regulations, investments.

1986 published by the Government Printer, which Schedules shall be construed L.N.

312/1986.

as one with these Regulations.

Rev.

2012] Insurance CAP.

487 159 [Subsidiary] 51.

For the purposes of section 197A (2), the rates of Levy shall be Monthly insurance training levy return.

(a) in case of gross direct premium written by such insurers, one L.N.

180/1992, percent (1%); and L.N.

124/1994, L.N2/2007, (b) in case of reinsurance premiums paid or credited to a reinsurer L.N.

135/2007, L.N.

97/2009.

outside of Kenya, ve percent (5%).

52.

For purposes of section 197A (4), the levies payable under regulation Monthly premium 51 shall tax return.

L.N.

180/1992, (a) become payable at the end of each calendar month in case of the L.N.

124/1994, gross direct premium; L.N2/2007, L.N.

135/2007.

(b) become payable at the end of each quarter in case of the reinsurance premiums, in which the premiums were received or paid by the insurer and shall be payable by such insurer not later than the last day of the rst month succeeding that in which the levies become due.

53.

For purposes of section 197E every insurer registered or authorized Annual premium tax to carry on insurance business in Kenya shall return.

L.N.

180/1992, (a) at the end of each calender month, prepare a monthly premium levy L.N.

124/1994, return, showing the total premiums due from the insurer for that L.N2/2007, particular month as set out in the Twenty Fourth Schedule; L.N.

135/2007.

(b) at the end of each quarter, prepare a quarterly reinsurance levy return, showing the total insurance premiums due from the insurer for that particular quarter as set out in the Twenty Seventh Schedule; and (c) at the end of each calender year and not later than the third month following the end of that year, prepare (i) an annual premium levy return as set out in the Twenty Fifth Schedule; and (ii) an annual reinsuarance premium levy return as set out in the Twenty Eighth Schedule.

54.

For the purposes of section 197B (2), the rates of the levy shall Monthly re-insurance be calculated at the rate of zero point two percent (0.2%) of the gross direct premium tax return.

premiums written by the insurer in respect of general insurance business.

L.N.

124/1994, L.N2/2007, L.N.

135/2007.

CAP160.

487 Insurance [Rev.

2012 [Subsidiary] Annual re-insurance 55.

For the purposes of section 197B (3), the form set out premium tax return.

in the Twenty Third Schedule shall be the form for the monthly L.N.

124/1994, insurance training levy return.

L.N2/2007, L.N.

135/2007.

L.N.

135/2007.

56.

For the purposes of section 197E, an insurer carrying on general insurance business in Kenya shall, at the end of each calender year and not later than the third month following that year, prepare an annual insurance training levy return as set out in the L.N.

135/2007.

Twenty Ninth Schedule.

57.

For the purposes of section 197E the levy payable under section 197B shall be paid by crossed bankers draft drawn in favour L.N.

135/2007.

of the Insurance Training and Education Trust 58.

For the purposes of section 4(2), all monies payable into the fund shall be paid by crossed bankers draft drawn in favour of the Insurance Regulatory Authority form no.

Ins.

30-1 FIRST SCHEDULE (ss.

30 & 188 (2) and rr.

5 and 48) All amounts in Kenya shillings aPPlICatIon for *regIstratIon/*renewal of regIstratIon of an Insurer for year endIng 31st deCember, 19 (*Delete whichever is not applicable) Read the Notes in Appendix F to this Form carefully and comply a.

aPPlICant 1.

Name: 2.

Registered Ofce: Postal Address: Telegraphic Address: Telex: Telephone: 3.

Location of Ofces: Principal: (give address) Rev.

2012] Insurance CAP.

487 161 Branches: [Subsidiary] (give address) 4.

Incorporation: Place: Date: Insurance Business: Date of rst licence: Date of Commencement: 5.

Particulars of (i) Members of Board of Directors (Appendix A) (ii) Principal Ofcer, Company Secretary and other senior management staff (Appendix B) (iii) Departmental staff (Appendix C) (iv) Auditors, Legal Advisers and Actuaries (Appendix D) (v) Members of the insurance industry excluding insurers whose services were availed of during the current year (Appendix E) Please complete the forms in the above-mentioned Appendices.

6.

Bankers: Name Address Since when 7.

(i) Does the applicant or a director or an employee of the applicant directly or indirectly hold shares in or have any other nancial or controlling interest in the affairs of another insurer or any agent, broker or other member of the insurance industry? If so, give details specifying name of the member, nature and extent of shareholding/ interest in Appendices A and B.

(ii) Is any of the individuals or rms listed in Appendices D and E (a) a director or employee of the applicant or a related company? (b) holding any shares in, debentures of, or other interests with the applicant or a related company? 8.

Share Capital a.

authorIsed CaPItal Number of Amount per Total Type of Shares Shares Share Amount (1) (2) (3) (4) CAP162.

487 Insurance [Rev.

2012 [Subsidiary] (a).

.

.

.

.

.

.

(b).

.

.

.

.

.

.

(c).

.

.

.

.

.

.

(d).

.

.

.

.

.

.

total.

.

.

.

.

b.

PaId-uP CaPItal Type of Number of Amount Total Total holdIng by Kenya CItIzens, by Shares Shares per Amount Number Kenya ComPanIes, by Kenya Share (2)(3) of share- PartnershIPs, by the goVernment Sh.

holders Total Total Percentage Number Amount of Total of Shares Sharehold- ing Voting rights (8) (1) (2) (3) (4) (5) (6) (7) (a).

.

.

(b).

.

.

(c).

.

.

(d).

.

.

total.

9.

In case the applicant does not have only ordinary shares of a uniform paid- up value as required under section 25 of the Act, describe the steps being taken to comply with the said requirement.

10.

Deposit under section 32 of the Act.

Amount of deposit made: Sh.

Central Bank of Kenyas Receipt No.(s):.

Date(s).

Rev.

2012] Insurance CAP.

487 163 11.

Business Particulars [Subsidiary] A.

Business Carried on/Proposed to be carried on (i) Classes of long-term insurance business: (Please refer to regulation 9) (ii) Classes of general insurance business: (Please refer to regulation 10) (iii) Other business.

B.

Number of agents (employed or expected to be employed in the next 12 months): Long-term insurance General insurance _ Total _C.

Is assistance being taken or proposed to be taken from a broker or agent or any other agency in respect of underwriting, claims handling, reinsurance, etc.

If so, please give details as under: (a) Name: (b) Work handled: (c) Reasons why outside agency is employed: (d) When is the work proposed to be handled by the applicant in his ofce: 12.

Actuarial Valuation: Date of the last valuation: Date of submission of the report to the Commissioner: 13.

Annual Accounts: Date up to which accounts made up: Date of submission of the accounts to the Commissioner: Date of last Annual Meeting of shareholders: Date of submission of minutes of the above meeting to the Commissioner: CAP164.

487 Insurance [Rev.

2012 [Subsidiary] 14.

Valuation of assets by a member of the Institute of Surveyors of Kenya: Date of valuation: Has a copy of the report been submitted? If so, date of submission: I hereby certify that the statements contained herein and in the documents submitted herewith required by section 30 or 188 (2) of the Insurance Act, and the Insurance Regulations, are true and accurate to the best of my knowledge and belief.

Any alterations in particulars stated herein or in the said documents will be promptly communicated to the Commissioner of Insurance.

I hereby declare that the company does not and does not intend to carry on any business other than insurance business for which it is seeking registration.

Signed on this.

day of.

, 19 Principal Ofcer Rev.

2012] Insurance CAP.

487 165 [Subsidiary] fo est e of tem p , 19 I of yt Details Inter h See.

30-1) c ember ( ns aye APPENDIX Am.

Ifoonse st December any u ndustr lna 31 II orm Name efvCpf.

uoe - er d As at ) i nterest i of IC aI nsuran (7pI Natur ff loa Business t al ot CIP dnn ) Ia ) rr , particulars of the same should be given ce ( b on elow mtIbutn2 , ) e our VIC bpC on ote ( yntCeht See f ORS ( ) oay ( leta1r es or No in the above form and if the apes es Held ne Below) v Number of i Shar (See Note gebdluohsslia Date of te Appointment d.

, s TICULARS OF BOARD OF DIRECT era AR hPsfosep.

Occupation yterom ess rPoow Residential Addr t of fence involving fraud or dishonesty? stsis on cgn es, give full details separately id Citizenship l ho e.

r ha Full s er: Name e Any conviction of an of Any adjudication as bankrupt or benet taken of any law for the relief of bankrupt or insolvent debtors or compounding with creditors.

30-1h ) ) tab ns f ( ( (c) Finding to be of unsound mind by a court of competent jurisdiction? Please state YII.

12.

Has there been in the past: or assignment of remuneration for benet of creditors for? answer is Y3.

If the space herein is insufcient, please use additional paper : orm : f te Serial a otes o Number 1.

.

.

2.

.

.

3.

.

.

4.

.

.

5.

.

.

6.

.

.

t Name of Insur dn shares.

If additional shares are held in the names of any relatives (who are not directors themselves) of the director separately CAP166.

487 Insurance [Rev.

2012 [Subsidiary] est of f of tem eI of p 19 Details Inter y , See.

30-1) t ( h ember y ns cm.

Ia APPENDIX Boenf any osn ndustr Name eIIu st December e orm lCfa 31 ev of p ) u nterest i of d As at I nsuran (7 Natur iI Business apl ) acto on 2ttIdt ) ( nba our VIC r es or No in the above form and if the C below) e on bC (See Note m ) ( uan ( , epf themselves) of the members of management staf y es 1teht Note below) f Number o AFF of Shar Held (See yl ST etarape ment s Date of appoint- nevige ears of bY Expe- rience d ul oh.

ssl ofes- i on aI sional tt Pr ead IC , fsI TICULARS OF MANAGEMENT e.

r fence involving fraud or dishonesty? ual a AR hPQsfo Academic s.

epyt es give details separately ess er tial o Residen- Addr m or o Principal Ofcerw Any conviction of an of Any adjudication as bankrupt or benet taken of any law for the relief of bankrupt or insolvent debtors or compounding with Age t ) ) ) Finding to be of unsound mind by a court of competent jurisdiction? Please state Yfabcostsisn ship o Citizen- cgnidloh ( ( Desig- e nation rahse.

30-1 er: h Full t Name f2.

Has there been in the post: ( ns II.

1 creditors or assignment of remuneration for benet of creditors? answer is Y3.

If the space herein is insufcient, please use additional paper : orm 1.

2.

3.

4.

5.

6.

7.

8.

f otes o Serial Number t Name of Insur Date: n shares If additional shares are held in the names of any relatives (who are not members of management staf particulars of the same should be given separately Rev.

2012] Insurance CAP.

487 167 [Subsidiary] 19 ns , ze i of Staff e not ta Ci APPENDIX C st December ny 1 Numbers who ar Ke (Please See Note 2 below) As at 3 otal T Others A.C.A., etc., please give the name and AFF ST .C.I.I., AL Messengers aff tA.C.I.I., Fs TMENT of AR umbers ypists nT Stenographers/ TICULARS OF DEP Clerks AR P Appendix B is also included here, please indicate below as note.

Principal Ofcerf is not a Kenya Citizen, please give the name, citizenship and the date of expiry of the entry permit issued f holds any professional qualications, such as Ofcers f listed in Act in a separate statement.

.

.

.

.

.

30-1 er: ns.

.

.

.

I Department 1.

If any management staf 2.

If any of the departmental staf under the Immigration 3.

If any of the departmental staf professional qualications in a separate statement.

AL orm : f OT T ote ot Name of Insur Underwriting.

.

.

.

Claims Administration.

.

.

.

Accounts.

.

.

.

.

Others.

.

.

.

.

(Please Specify).

.

.

.

Date: n CAP168.

487 Insurance [Rev.

2012 [Subsidiary] APPENDIX D to form Ins.

30-1 PARTICULARS OF AUDITORS, LEGAL ADVISERS AND ACTUARIES Name of Insurer: As at 31st December, 19 Name Address Partners Professional Since of Firm Names Qualications When audItors 1.

2.

3.

legal adVIsers 1.

2.

3.

aCtuarIes 1.

2.

3.

Date: Principal Ofcer APPENDIX E PARTICULARS OF MEMBERS OF INSURANCE INDUSTRY WHOSE SERVICES AVAILED OF Name of Insurer: As at 31st December, 19 Members of the Nature Shareholding Insurance Industry Name Address of Work or other Interest Registration (Please See Note 1) Handled (Please See Note 2) Number (1) (2) (3) (4) (5) (6) Date: Principal Of- cer notes: 1.

State here broker, agent or any other capacity in which the member is registered under the Act.

2.

Please give information of number and type of shares held, amount, of shareholding and any other interest as per item 7(ii) of FORM INS.

30-1.

3.

If the space herein is insufcient, please use additional paper.

4.

Please mention in column (6) the reference number of the registration under the Insurance Act, 1984.

Rev.

2012] Insurance CAP.

487 169 [Subsidiary] APPENDIX F to form Ins.

30-1 lIst of doCuments to be submItted A.

Statements/documents and information required from an insurer applying for registration to the Commissioner: (a) A copy of the memorandum of association or other instrument or document by which the applicant is constituted.

(b) A copy of the articles of association or other rules of the applicant.

(c) A certied copy of the published prospectus, if any.

(d) A copy of each of the proposal and policy forms, endorsements and any form of written matter describing the terms or conditions of or the benets to or likely to be derived from policies or intended to be used by the applicant.

(e) Statements of the premium rates, advantages and terms and conditions to be offered in connection with insurance policies and details of the bases and formulae from which those rates have been calculated.

(f) In connection with long-term insurance business, a certicate by an actuary that the rates, advantages, terms and conditions proposed to be offered are sound and workable.

(g) Detailed statement of assets and liabilities as at the date of application.

(h) A description of all reserves with detailed descriptions of the method, bases and formulae for calculating each of the reserves.

(i) A certicate from the Central Bank of Kenya specifying the amounts and details of deposits made by the applicant under section 32 of the Act.

(j) Certied copies of reinsurance contracts.

(k) The prescribed fee and a certied copy of the receipt should be enclosed.

note: In case the applicant is a member of a tariff body in Kenya, in respect of one or more classes of insurance business, please mention it whilst dealing with (e) and (f) above and indicate variations of any, made in the policy wording and premium rating schedules from those provided under tariff regulations.

CAP170.

487 Insurance [Rev.

2012 [Subsidiary] B.

Statements required in terms of section 30 (k) of the Act (a) A photo-copy of the certicate of incorporation.

(b) Financial forecasts as required under regulation 7 (b).

(c) An estimate of sources of business as required under regulation 7 (c).

(d) A summary of reinsurance treaties as per regulation 7 (d).

(e) Copies or drafts agreements as per regulation 7 (e).

(f) Copies or drafts of any standard agreements with brokers and agents as per regulation 7 (f).

(g) In the case of long-term insurance business, an actuarys certicate with regard to adequacy of nancing arrangements as per regulation 7 (g).

(h) In the case of a new insurer or a new class of insurance business of an existing insurer, estimates of cost of installation and other information as per regulation 7 (h).

(i) Copies of accounts, statements and reports laid before shareholders as per regulation 7 (i).

(j) In the case of an insurer carrying on long-term insurance business, copies of valuation reports as per regulation 7 (j).

note: Items (b) to (h) above apply to an insurer who has not transacted insurance business before or where authorisation is sought to trans- act a class of business not transacted before.

SECOND SCHEDULE (s.

41 (9), rr.

8) determInatIon of admItted assets and admItted lIabIlItIes for solVenCy PurPoses Part a For the purposes of section 41 of the Act: 1.

Assets shall be valued at values not exceeding their market or realisable value and in particular (a) the value of lands and buildings shall not exceed the value determined on the basis of a valuation by a member of the Institute of Surveyors of Kenya who is not a permanent employee of the insurer, at least once in every ve years or, at such shorter interval as the Commissioner may consider necessary, if the circumstance Rev.

2012] Insurance CAP.

487 171 in any particular case so demand; [Subsidiary] (b) where the market value of any security, share, debenture, bond or other investment is not ascertainable, only such value, if any, shall be taken into account as is considered reasonable, having regard to the nancial position of the issuing concern, the dividend paid by it during the preceding ve years and other relevant factors; (c) the value of any computer equipment of an insurer, (i) in the nancial year of the insurer in which it is purchased, shall not exceed three- quarters of the cost thereof to the insurer; (ii) in the rst nancial year thereafter, shall not be greater than one-half of that cost; (iii) in the second nancial year thereafter, shall not be greater than one-quarter of that cost; and (iv) in any subsequent nancial year, shall be left out of the accounts; (d) the value of ofce machinery (other than computer equipment), furniture, motor vehicles and other equipment shall be, in the nancial year in which it is purchased, not greater than one-half of the cost thereof and shall be, in any subsequent nancial year, left out of account; (e) dead stock and stationery shall be excluded.

2.

A proper value shall be placed on every item of the liabilities.

In determining an insurers liabilities, the share capital, general reserve, reserve for bad and doubtful debts, depreciation fund and other reserves of similar nature not created to meet specic liabilities approved by the Commissioner, shall be excluded.

The liabilities listed hereafter shall be included to the extent indicated: (a) Provision for dividends declared and outstanding, in full.

(b) Amounts due to other persons or bodies carrying on insurance business, in full.

(c) Amounts due to sundry creditors, in full.

(d) Provision for taxation, in full.

3.

Adequate provisions shall be made, in accordance with methods approved by the Commissioner, in respect of unearned premiums, unexpired risks and outstanding claims, including provision for claims incurred but not reported.

4.

Statements of admitted assets and admitted liabilities shall be prepared, separately in respect of (a) long-term insurance business; and (b) general insurance business, in the form prescribed in Part B of this Schedule.

form no.

Ins.

41-1 All Amounts in Kenya Shillings Part b CAP172.

487 Insurance [Rev.

2012 [Subsidiary] STATEMENT OF ADMITTED ASSETS AND ADMITTED LIABILITIES Name of Insurer As at 31st December, 19 long-term InsuranCe general InsuranCe busIness busIness Description Market or Book Value Market or Book Values Realizable (as shown Realiable (as shown Value in balance Value in balance sheet) sheet) I.

admItted assets (1) Investments Referred to Section 50 (3) of the Act: (i) Kenya Government securities.

(ii) Securities issued by statutory bodies prescribed under section 50 (3)(b) of the Act.

(iii) Securities issued by local authorities.

(iv) Securities issued by organisations prescribed under section 50 (3)(d) of the Act.

Sub-Total (1) form no.

Ins.

41-1(Contd.) All Amounts in Kenya Shillings Part b statement of admItted assets and admItted lIabIlItIes Name of Insurer As at 31st December, 19 Rev.

2012] Insurance CAP.

487 173 [Subsidiary] long-term InsuranCe general InsuranCe busIness busIness Market or Book Market or Book Description Realisable Value Realisable Value Value (as Value (as shown in shown balance in sheet) balance sheet) (2) Investments Referred to in Section 50 (4) of the Act.

(i) Mortgages on unencumbered im- movable property in Kenya.

(ii) Debentures secured by mortgage on unencumbered immovable property in Kenya.

(iii) Loans on life assurance policies within their surrender values.

(iv) Land and buildings in Kenya (i.e., instruments of title to immovable property in Kenya).

(v) Debentures shares of public com- panies whose shares are quoted on stock exchange in Kenya.

(vi) Preference shares of public com- panies whose shares are quoted on stock exchange in Kenya.

(vii) Ordinary shares of public compa- nies whose shares are quoted on stock exchange in Kenya.

(viii) Deposits in banks or nancial institutions licensed under the Banking Act.

(ix) Other prescribed securities (spec- ify).

Sub-Total (2) CAP174.

487 Insurance [Rev.

2012 [Subsidiary] (3) Other Admitted Assets (i) Debentures of public companies whose shares are not quoted on stock exchange in Kenya.

(ii) Preference shares of companies whose shares are not quoted on Stock Exchange in Kenya.

(iii) Ordinary shares of companies whose shares are not quoted on stock exchange in Kenya.

(iv) Motor Vehicles.

(v) Computer equipment.

(vi) Ofce machinery (other than computer equipment), furniture, xtures and other equipment.

(vii) (Deleted by L.N.

85/2010).

(viii) Amounts due from re-insurers.

(ix) Amounts due from unrelated bodies.

(x) Amounts due from related bodies engaged in insurance business.

(xi) Interest, dividend and rents either outstanding or accrued but not due.

(xii) Cash in hand and on current account in banks in Kenya.

(xiii) Other assets* (specify).

Sub-Total (3) total admItted assets (1+2+3) Rev.

2012] Insurance CAP.

487 175 [Subsidiary] Form No.

INS.

41-1 (Contd.) All Amounts in Kenya Shillings Part b statement of admItted assets and admItted lIabIlItIes Name of Insurer As at 31st December, 19 long-term InsuranCe general InsuranCe busIness busIness Description Market or Book Market or Book Realisable Value (as Realisable Values Value shown in Value (as balance shown sheet) in balance sheet) II other assets Assets which do not qualify as admitted assets; (i) On account of section 42 (1) of the Act.

(ii) On account of Part A to this schedule.

otal other assets (i) + (ii) CAP176.

487 Insurance [Rev.

2012 [Subsidiary] III admItted lIabIlItIes Long Term General Insurance Business Insurance (1) Provisions Business (i) Taxation.

(ii) Dividends: declared and outstanding.

(iii) Other provisions, excluding provision for doubtful debts.

(2) Bank overdrafts and Bank loans.

(3) Amounts due to related bodies excluding amounts shown under (4) below engaged insurance business; other business (excluding banking).

(4) Amounts due to insurers (including related bodies) under reinsurance contracts.

(5) Other amounts due to insurers (not being related bodies).

(6) Debentures.

(7) Other loans: secured; unsecured.

(8) Sundry creditors.

(9) Other sums owing by the insurer (specify).

(10) Underwriting provisions: (a) Estimated liability in respect of outstanding claims whether due or intimated.

(b) Provision for incurred but not reported claims.

(c) Annuities due and unpaid.

(d) General insurance business Premium Provision: unearned premium provision.

other premium provision (specify).

(e) Other underwriting provisions (specify).

(f) Long term insurance business funds: Total amount standing to the credit of the statutory fund or funds maintained by the insurer in respect of long term insurance business or the amount of those liabilities as determined by an investigation performed in accordance with section 57 of the Act and approved by the Commissioner, whichever is the greater.

total admItted lIabIlItIes Date Auditor Principal Ofcer N OTES An insurer shall, when lodging Form No.

INS.

41-1 with the Commissioner (a) where any asset which is encumbered is included in a class of assets for which class a value is given in the statement, attach to Rev.

2012] Insurance CAP.

487 177 the statement particulars of the asset, the nature of the encumbrance [Subsidiary] and the amount secured by the encumbrance; (b) attach a description and estimate of the nancial obligation in respect of each chattel which is hired or leased to the insurer where the obligation in respect of such chattel exceeds one hundred thousand shillings in value; (c) in calculating the amounts to be entered in the statement, take account of only those amounts considered recoverable under rights of subrogation in respect of which the judgment of a court or an arbitral award has been obtained in favour of the insurer or in respect of which the person liable, or a person acting on his behalf, has agreed in writing to pay the amount due; (d) attach particulars of all contingent liabilities of the insurer (including contingent liabilities arising from the endorsement of bills of exchange) other than contingent liabilities in respect of insurance underwriting business; (e) attach particulars of amounts written off the value of any freehold or leasehold premises held by the insurer or the value of any lease of premises granted to the insurer; (f) attach details of each asset shown in the statement, the value of which exceeds ten per centum of the total value entered in the statement in respect of all entries marked on the Form with the symbol (*).

(g) attach a statement showing in respect of each item of land and building the following details, namely (i) situation of the property; (ii) whether land or building or both; (iii) whether land is freehold or leasehold; (iv) date of purchase; (v) total amount invested by the insurer; (vi) net annual rental value of the property (i.e.

net of taxes, maintenance, depreciation etc.); (vii) market value as stated in the statement; and (viii) date of the last valuation by a member of the Institute of Surveyors of Kenya and the name of the valuer.

(h) in respect of deposits in banks or nancial institutions licensed under the Banking Act, attach a statement giving the name and the CAP178.

487 Insurance [Rev.

2012 [Subsidiary] address of each bank or nancial institution, the amount of deposit, the rate of interest and the maturity dates of the deposits; (i) in respect of mortgages on immovable property in Kenya attach a statement giving the following details in respect of each mortgage, namely (i) location of the property and name of the owner; (ii) whether land or building or both; (iii) whether land is freehold or leasehold; (iv) outstanding period of the lease if property is leasehold; (v) outstanding period of the mortgage if property is leasehold; (vi) value of the property, the date of last valuation and name of the valuer; (vii) amount advanced; (viii) date of advance; (ix) rate of interest; and (x) amount outstanding (principal and interest to be shown separately); (j) in respect of investments shown under paragraph I-(1) in the Form, attach a statement giving in respect of each security the full description, date of purchase, date of maturity, rate of interest, face value, book value and market value; (k) in respect of investments in debentures shown under paragraphs I-(2) (ii), I-(2) (v) and I-(3) (i) in the Form, attach a statement, giving in respect of each investment, grouped separately according to the above-mentioned paragraphs (i) the name of the company; (ii) date of purchase; (iii) date of maturity; (iv) rate of interest; (v) face value; (vi) book value; (vii) market value; and (viii) details about the interest paid or payable during the last three years.

(state whether paid or not paid in respect of each year); (l) in respect of investments in preference shares of companies shown under paragraphs Rev.

2012] Insurance CAP.

487 179 I-(2) (vi) and I-(3) (ii) of the Form, attach a statement giving in [Subsidiary] respect of each investment, grouped separately according to the above-mentioned paragraphs (i) the name of the company; (ii) date of purchase; (iii) rate of interest; (iv) face value; (v) book value; (vi) market value; and (vii) details about the interest paid or payable during the last three years (State whether paid or not paid in respect of each year); (m) in respect of investments in ordinary shares of companies shown under paragraphs I-(2) (vii) and I-(3) (iii) of the Form, attach a statement giving in respect of each investment, grouped separately according to the above-mentioned paragraphs (i) the name of the company; (ii) date of purchase; (iii) face value; (iv) book value; (v) market value; and (vi) rates of dividend paid during the last three years; (n) attach a statement showing details of the investments, if any, which do not comply with the provisions of subsections (6), (9) and (10) of section 50 of the Act and attach copies of the exemption documents obtained under those sections.

All the statements hereinbefore mentioned shall be signed by the Principal Ofcer.

CAP180.

487 Insurance [Rev.

2012 [Subsidiary].

10) Risks and (s.

52 and rs All go Business Liability ransit Sub-Class of viation A Contractor Engineering Insurance Others FireDomestic FireIndustrial Products Professional Indemnity Other Liability Marine Hull Marine Car Other T MotorPrivate MotorCommercial Personal Accident Sickness Health/Medical Expenses Insurance (where sepa- rate policies are issued).

Serial Number 010 020 021 030 040 050 051 052 060 061 062 070 080 090 091 lasses -C ub s and Class viation Marine AA Engineering Liability T lasses Brief Description of FireDomestic FireIndustrial MotorPrivate MotorCommercial Personal Accident RC PA ness I THIRD SCHEDULE us be liability C nsuran Is Risks, Machinery eneral g ehicles.

V.

ehicles.

All Risks and Consequential Loss from V Accident Insurance.

Class of Business viation Insurance.

A Serial Number 01 02 Engineering Insurance including Contractor Breakdown, Erection Breakdown.03 Fire InsuranceDomestic Risks including Houseowners, Householders and other comprehensive package covers.04 Fire InsuranceIndustrial and Commercial Risks and consequential loss from re insurance.05 Liability Insuranceincluding public liability products and professional indemnity06 Marine Insurance.07 Motor InsurancePrivate 08 Motor InsuranceCommercial 09 Personal Rev.

2012] Insurance CAP.

487 181 [Subsidiary] s Liability s Compensation Business ransit All Risks and Sub-Class of , Theft Insurance Act or the glary orkmen Any other Insurance Cash-in-T Fidelity Guarantee Bur other W and Employer Medical Insurance Bond Insurance Livestock Insurance Crop Insurance 0 130 131 132 133 Serial Number 100 101 102 11 120 lasses -Cs ub s and Class Theft orkmen Medical Miscellaneous Contd.) AW Compensation ( T lasses Brief Description of RC PA ness hedule IC us sb rd eICht nsuran I ransit and Fidelity s Liability Insurance.

eneral g , Cash-in-T hall have the meanings as per Part B of this Schedule unless otherwise dened in the glary asses ss Compensation and Employer Class of Business orkmen Theft Insurance including Bur W The above classes and sub-cl : 1 ote Serial Number 10 Guarantee.

1 12 Medical insurance 13 Miscellaneous Insurance (i.e., class of business not included under those listed above).

n Regulations.

CAP182.

487 Insurance [Rev.

2012 [Subsidiary] Part b general InsuranCe busIness defInItIons of Classes of InsuranCe Serial Number For the purposes of these Regulations the following are the denitions of the classes of general insurance business listed in Part A of this Schedule: 01 Aviation insurance business means the business of effecting and carrying out contracts of insurance (a) upon the aircraft or upon the machinery, tackle or furniture or equipment of aircraft; (b) against damage arising out of or in connection with the use of aircraft or against risks incidental to construction, repair or landing of aircraft, including airport owners liability and third party risks; (c) against loss of life by accident, or injury by accident to aircrew members whilst performing or deemed to be performing their duties in accordance with their employment but does not include contracts of insurance in respect of risks of aviation excess of loss or crew loss of licence.

02 Engineering insurance business means the business of effecting and carrying out contracts of insurance of various perils arising out of plant and machinery, such as explosion or collapse of boilers, breakdown of electrical or mechanical plant and lifts and cranes, and resultant damage to the insureds surrounding property and liability to third parties arising therefrom, also including contracts of insurance in respect of contract works covering damage to property on site however caused and third party liability arising therefrom.

Fire insurance business means the business of effecting and carrying out of contracts of insurance, otherwise than incidental to some other class of insurance business against loss of or damage to property due to re, explosion, storm, and other occurrences customarily included among the risks insured against in re insurance policies.

03 Fire insurance businessDomestic Risks means re insurance of risks which are of private or personal use, that is, other than commercial or industrial use.

04 Fire insurance businessIndustrial and Commercial risks means re insurance of commercial or industrial risks which are not domestic risks.

05 Liability insurance business means the business of effecting and carrying out contracts of insurance against risks of persons insured incurring liabilities to third parties, not being risks arising out of, or in connection with the use of, motor vehicles or out of, or in connection with the use of, vessels or aircraft or risks incidental to the construction, repair or docking of vessels or aircraft.

Rev.

2012] Insurance CAP.

487 183 [Subsidiary] Serial Number and carrying fecting ef of means the business business insurance 06 Marine out contracts of insurance , tackle, furniture or equipment ) upon vessels or upon the machinery a ( of vessels; on board or property of any description b) upon goods, merchandise ( of vessels; ng to, ati n or rel i erest nt ight of, or any other i (c) upon the fre vessels; y arising out of, or in connection with, the use of (d) against liabilit vessels; or docking of repair to the construction, ) against risks incidental (e vessels, including third-party risks; , land ter and wa nl t is by sea, i ther the transi transit risks (whe ) against f ( risks incidental , or partly one and partly another), including or air to the transit of the encement comm insured from the transit to the ultimate destination covered by the insurance; or which is customarily against any other risks insurance g) against ( ng ki a rt unde he o, ttla nt de i nc sih, or at on wi it unc onj ncni ke a rt unde of such business as falls within this denition.

gni ry radcna ng itc fe ffe ss o ne si bu he ns taem ss en usi bec ran nsu riot Mo of, or damage to, or arising out of or in out contracts of insurance against loss connection with the use of, motor vehicles, inclusive of third-party risks but exclusive of transit risks.

means motor insurance 07 Motor insurance businessPrivate vehicles commercial other business or for used not vehicles si.e.

vehicle private of purposes.

means motor insurance cial vehicles Commer 08 Motor insurance business of commercial vehicles used for business and other commercial purposes.

fecting Insurance business means the business of ef Accident 09 Personal risks of the persons insured against of insurance and carrying out contracts class specied a of accident an or accident an of result the as injury sustaining or class specied a of accident an of or accident an of result the as dying or specied a of disease of or disease of consequence in incapacitated becoming erm insurance business.

class, not being contracts of Long-T fecting and carrying out 10 Theft insurance business means the business of ef to property due to theft or any of insurance against loss of or damage contracts insurance the include shall and class any other under covered not cause other of cash in transit, delity guarantee insurance and all risks insurance.

CAP184.

487 Insurance [Rev.

2012 [Subsidiary] 11 Workmens compensation insurance business means the business of effecting and carrying out contracts of insurance against the liability of the employer to the employees in respect of any injury or disease arising out of and in the course of their employment.

12 Miscellaneous insurance business means the business of effecting and carrying out contracts of insurance which are not principally or wholly of any type or types included in other classes of business but shall include insurance of bonds of all types, insurance of livestock and crop insurance.

Rev.

2012] Insurance CAP.

487 185 [Subsidiary] sg otal 14 n lli , 19 T (01 to 13) ihaSyn Ke 13 n Miscellaneous ts i un o 12 mA Medical ll ear ending 31st December Insurance AYs 11 orkmen W Compensation Theft 10 Personal Accident 09 cial 08 Motor Commer 07 ounts CC Motor Private Principal Ofcer a enue V 06 er Marine ector - ness usI 1 of the Insurance Regulations, 1986) b 05 C Ce Liability t ar Insuran e- 04 Fir Industrial eneral g Fire- 03 ector Dir Domestic 02 Engineering o be completed in accordance with regulation 1 01 viation A123456789 10 11 12 13 14 15 16 17 18 19 20 21 22 Auditor Dir ing n loss in Loss g & brought be or deduction rve he se t Prot (Tt1).

.

prot sk re tanding at the end ing a before to nd Class of Business d ri outs tsta re u receivable xpi so transferred.

54-1P er: m underwriting.

.

i loss ns la une income or.

Ilco ona t of being nint prot orm mount of claims ou otal claims incurred (9+101 otal Expenses (13 + 14) f Name of Insur Gross Premium Reinsurance Premium Net Premium (12) Unearned Premium brought forward Addi forward Unearned Premium carried forward Additional unexpired risk reserve carried forward Net earned Premium (3+4+567) Claims paid A of the year Am of the year T Commissions Expenses of Management T Balance (81215) Increase (decrease) in the fund (3913).

.

Investment of tax Other expenses (specify).

.

.

Gross Account (16+1819).

.

.

Insurance fund at the beginning of the year Insurance fund at the end of the year (17+18 1921).

.

.

Items numbers 3, 9, 13, 14, 15, 17, 18, 19, 20, 21 and 22 only need be completed in respect of a class of business which is funded business and items 17, 21 and should be omitted in respect of the class of business.

Date: CAP186.

487 Insurance [Rev.

2012 [Subsidiary] gs nill , 19 ih otal SayneTKnist un omAll ear ending 31st December AY Pensions Superannuation ector Principal Ofcer 34 oup Life Gr 33 dinary Life Or ounts CC a 32 enue Ver ector Dir - Industrial Life ness I1 of the Insurance Regulations, 1986) us bCetC ar 31 Dir P nsuran I Bond Investment erm t ong l123 4A 4B 4C 56789 10 11 12 13 14 15 16 17 18 19 Auditor o be completed in accordance with regulation 1 Account (T 54-2 er:.

1+12) ns I.

on orm otal claims (4A+4B+4C) otal benet payment (6+7+8).

.

.

otal (10+1 ransfer to (or from) Prot and Loss f Name of Insur Class of Business Gross Premium Reinsurance Premium Net Premium (12) Claims paid and outstanding By death By Maturity Others (specify) T Surrenders (Including surrender of bonus)Bonuses paid in cash or for deduction of premiumAnnuities paidT Commissions Expenses of Management Other expenses (specify) T Investment Income Investment expenses T Increase or decrease in the fund (3913+1412+16)Insurance fund at the beginning of the yearInsurance fund at the end of the year (17+18)Date: Rev.

2012] Insurance CAP.

487 187 [Subsidiary] form no.

Ins.

543 general InsuranCe busInessaddItIonal statement for funded busIness Class of busIness (To be completed in accordance with regulation 11 of the Insurance Regulations, 1986) All Amounts in Kenya Shillings Name of Insurer Year Ending 31st December, 19 Balance at the beginning of year Current Last Previous Total Year Year Year 1 Premiums 2 Other income (specify) 3 Total Income (2+3) Claims paid 5 Commission 6 Expenses of Management 7 Other outgoings (specify) 8 Total outgoings (5+6+6+7+8) 9 Balance at the end of the year 10 (1+49) Date: Auditor Principal Ofcer Director Director CAP188.

487 Insurance [Rev.

2012 [Subsidiary] form no.

Ins.

544 PROFIT AND LOSS ACCOUNT 1966) (To be completed in accordance with Regulation 11 of the Insurance Regulations, All Amounts in Kenya Shillings Name of Insurer: Year Ending 31st December, 19 InCome Prot transferred from Revenue Accounts 1 Investment income (not to any fund or account) 2 total InCome (1+2) 3 outgo Loss transferred from Revenue Accounts 4 Management Expenses (not charged to any particular fund or 5 account) Depreciation (not charged to any particular fund or account) 6 Bad Debts (not charged to any particular fund or account) 7 TOTAL OUTGO (4+5+6+7) 8 Prot or loss before taxation (38) 9 Provision for taxation 10 Prot or loss after taxation (910) aPProPrIatIon 11 Unappropriated prot/loss brought forward 12 Total amount of prot available for appropriation (11+12) 13 Transfers to reserves (specify) 14 Dividends paid or proposed to be paid 15 Other appropriation (specify) 16 Unappropriated prot/loss carried forward (131415 16) 17 Dated: Principal Ofcer Auditor Director Director NOTES 1.

Under items 1 and 4, the amounts transferred from (1) Long Term and (2) General Insurance revenue accounts must be stated separately.

2.

Amounts under items 2, 5, 6 and 7 should be those which do not pertain to any fund or account and as such are not included in the revenue accounts.

3.

Where this account includes any amounts of dividends or other payments to shareholders, the nancial year in respect of which those dividends or other payments are made shall be stated.

form no.

Ins.

545 Rev.

2012] Insurance CAP.

487 189 BALANCE SHEET [Subsidiary] long-term InsuranCe busIness/general InsuranCe busIness* (*Delete whichever is not applicable) All Amount in Kenya Shillings Name of Insurer: As at 31st December, 19 PART A1.

Share Capital Issued Nominal Share Capital Less Nominal value of unissued shares Nominal value of issued shares 2.

Share Capital Paid-up 3.

Reserves General Investment uctuation Unappropriated surplus (if any) Other Sub-Total Less Un-appropriated decit (if any) Total Reserves 4.

Total of Paid-up Capital and Reserves Represented by difference between total Assets and Liabilities as under: PART B ASSETS 5.

Fixed Assets Land and buildings less depreciation Motor vehicles less depreciation Computer equipment less depreciation Furniture, xtures, ttings and ofce equipment other than computer equipment less depreciation CAP190.

487 Insurance [Rev.

2012 [Subsidiary] form no.

Ins.

545(Contd.) BALANCE SHEET long-term InsuranCe busIness/general InsuranCe busIness (*Delete whichever is not applicable) All Amount in Kenya Shillings Name of Insurer: As at 31st December, 19 Fixed Assets Other* less depreciation Sub-Total (5) 6.

Investments (i) Securities issued by: Government of Kenya* Local Government authorities State Corporations* Other organisations Prescribed under section 50 (3) (d) of the Act Sub-Total 6 (i) Related Other Total Bodies (ii) Other Corporate *Ordinary Shares (Quoted on a Kenyan Stock Exchange) *Preference Shares (Quoted on a Kenyan Stock Exchange) *Preference Shares (Unquoted) *Debentures and notes (Quoted on a Kenyan Stock Exchange) *Debentures and notes (Unquoted) Loans Secured by mortgages on real property* on personal property* other* Loan on life insurance policies within their surrender value unsecured Loans to directors of the insurer or related bodies and the spouses of those directors employees of the insurer other* Deposits with banks non-bank nancial institutions building Societies others* SubTotal 6 (ii) Rev.

2012] Insurance CAP.

487 191 [Subsidiary] SubTotal 6 (i)+(ii) 7.

Current Assets Cash Premiums outstanding** All Amount in Kenya Shillings Name of Insurer: As at 31st December, 19 Amounts retained under reinsurance Related Other Total Contracts* Bodies Amount due from bodies engaged in Corporate Insurance business** Other business** Sundry debtors** Other* Sub-Total (7) 8.

Intangible Assets Goodwill Establishment expenses Other* Sub-Total (8) 9.

Total Assets (5+6+7+8) LIABILITIES 10.

Underwriting Provisions Long-term insurance business Statutory funds (to be specied) Premium Provisions Unearned premium provision Other premium provisions Outstanding claims provision Other underwriting provisions* SubTotal (10) CAP192.

487 Insurance [Rev.

2012 [Subsidiary] 11.

Long-Term Liabilities Bank loans Amount due to related bodies engaged in Insurance business (other than under reinsurance contracts) Other business (excluding banking) Amount due to insurers (including related bodies) under reinsurance contracts Other amount due to insurers (not being related bodies) Debentures Other Loans Secured Unsecured Other* Sub-Total (11) 12.

Current Liabilities Provisions Related Taxation Bodies Other Total Dividends Corporate Other provisions excluding Provisions for doubtful debts* Bank overdraft and bank loans Amounts due to related bodies engaged in Insurance business Other business (excluding banking) Amounts due to insurers (not being related bodies) Debentures Other loans unsecured Sundry creditors Other Sub-total (12) 13.

Total Liabilities (10+11+12) 14.

Difference between Total Assets and Liabilities (913) Date: Director Auditor Principal Ofcer Director Rev.

2012] Insurance CAP.

487 193 Part d [Subsidiary] DIRECTIONS FOR THE PREPARATION OF FORMS Ins.

nos.

541, Ins.

542, and Ins.

543 1.

A revenue account in the prescribed form should be prepared in respect of each class of business referred to in regulations 9 and 10.

2.

The amount of premium is to be recorded in relation to the date on which the contract of insurance was incepted.

In this connection incepted refers to the time when the liability to risk of the insurer under a contract of insurance commenced and, for this purpose, a contract providing permanent open cover should be deemed to commence on each anniversary date of the contract.

3.

Premiums shall be shown less discounts, refunds and rebates.

4.

Premiums, claims, surrenders and annuities shall be shown net of reinsurances and commissions shall be shown after taking into account commissions received on reinsurances ceded and commissions paid on reinsurances accepted.

5.

If any sum has been deducted from an expenditure item and entered on the assets side of the Balance Sheet, the sum so deducted shall be shown separately.

6.

All entries in the above forms shall be in respect of insurers total business i.e.

Kenya business and outside Kenya business.

7.

Particulars of each item of expense or income, as the case may be, included in and which accounts for more than ten per centum of the amount shown in respect of other income or other expenditure shall be given.

8.

The basis on which reserves for unearned premium, unexpired risks and incurred but not reported claims in respect of each class of general insurance business were calculated should be stated by way of supplementary notes.

9.

Where in respect of Aviation and/or Marine insurance business an insurer elects to account for the business on a three-year basis, he shall, in addition to the information furnished under Form INS.

No.

541, furnish the break-up in the Form INS.

No.

54-3 and also attach a certicate, signed by the same persons as are required to sign the revenue account, stating whether the fund carried forward for each of the three years of account is, in their opinion sufcient.

DIRECTIONS FOR PREPARATION OF THE BALANCE SHEET form Ins.

545 1.

Separate balance sheets shall be furnished for General Insurance CAP194.

487 Insurance [Rev.

2012 [Subsidiary] Business and for Long-Insurance Business.

2.

An insurer when lodging with the Commissioner a statement in accordance with the above form in the Third Schedule shall (a) where any asset which is encumbered is included in a class of assets for which class a value is given in the statement, attach particulars of the asset, the nature of the encumbrance and the amount secured by the encumbrance; (b) attach particulars of all contingent liabilities of the insurer (including contingent liabilities arising from the endorsement of bills of exchange) other than liabilities under contracts of insurance; (c) attach particulars of each liability and asset which accounts for more than ten per centum of the total amount shown in respect of each of the items marked on the above form with the symbol*; and (d) deduct amounts for bad and doubtful debts in calculating the amounts to be inserted in respect of the items marked with the symbol**.

3.

The value of an asset or liability shall be the value of that asset or liability as determined in accordance with such criteria as may be prescribed by a professional body of accountants, if any, or in accordance with generally accepted accounting concepts, bases and policies or other generally accepted methods deemed by accountants practising in Kenya to be appropriate for insurers transacting business in Kenya.

FOURTH SCHEDULE(s.

57 (1) (b) and r.

12) Part aProVIsIons relatIng to the PreParatIon of abstraCts of aCtuarys rePorts seCtIon I1.

Abstracts and statements shall be so arranged that the numbers and letters of the paragraphs correspond with those of the provisions of section II of this Schedule.

2.

Where any table of mortality or sickness used in a valuation is not a published table, then for the purpose of complying with provision (3) of Part II of this Schedule, specimen policy values shall be given at the rate of interest employed in the valuation in respect of whole life insurance policies effected at the respective ages of 20, 30, 40 and 50 and having been in force respectively for ve years, ten years and upwards at intervals of ten years; and similar specimen policy values shall be given in respect of endowment insurance policies effected at the respective ages of 20, 30 and 40 for endowment terms of twenty and Rev.

2012] Insurance CAP.

487 195 [Subsidiary] thirty years, and in the case of policies involving continuous disability benets, specimens of the valuation factors must be given: Provided that where the specimen policy values or valuation factors required by this provision to be given are the same as those given in any abstract prepared under Part II of this Schedule previously submitted by the insurer to the Commissioner, it shall be sufcient in any abstract subsequently submitted to refer to the specimens so given in such manner as to enable the Commissioner to ascertain the required information.

3.

In showing the proportion which that part of the annual premiums reserved as a provision for future expenses and prots bears to the total of the annual premiums, in accordance with the requirements of provision (4) of Part II of this Schedule, no credit is to be taken for any adjustments made in order to ensure that no policy is treated as an asset.

4.

(i) The average rate of interest earned or yielded in any year by the assets constituting a statutory fund shall, for the purpose of provision (5) or Part II of this Schedule, be calculated by dividing the interest of the year by the mean fund of the year; and for the purposes of any such calculation the interest of the year shall be taken to be the whole of the interest, dividends and rents credited to the statutory fund during the year after deduction of rates and taxes (any refund of rates or taxes made during the year being taken into account), and the mean fund of the year shall be ascertained by adding a sum equal to one half of the aggregate of the balance or balances of the revenue account or accounts and the balance or balances of any reserve accounts in respect of the long-term insurance business to which the statutory fund relates at the beginning of the year to a sum equal to one half of the aggregate of the balances of those account at the end of the year, and deducting from the aggregate of those two sums an amount equal to one half of the interest of the year.

(ii) It must be stated in what manner the sums invested in reversions and the income and prots derived from those reversions have been treated in circulating the average rate of interest.

5.

Every abstract prepared in accordance with the requirements of Part II shall be signed by an actuary and shall contain a certicate by him to the effect that he has satised himself as to the accuracy of the valuation made for the purpose thereof and of the valuation data: Provided that if the actuary who signs the abstract is not a permanent ofcer of the insurer, the certicate as to the accuracy of the valuation data shall be given and signed by the principal ofcer of the insurer and the actuary shall insert in the abstract a statement signed by him showing what precautions he has taken to ensure the accuracy of the data.

6.

For the purposes of this Schedule extra premium means a charge for any risk not provided for in the minimum contract premium; CAP196.

487 Insurance [Rev.

2012 [Subsidiary] inter-valuation period means, in relation to any valuation in respect of any class of business, the period to the valuation date of that valuation from the valuation date of the last preceding valuation under the Act, or under the Insurance Companies Act, 1960, or in a case where no preceding valuation has been made in respect of that class of business, from the date on which the insurer began to carry on that class of business; maturity date means the xed date on which any benet will become payable either absolutely or contingently; net premiums means, in relation to any valuation, the premiums for which credit is taken in the valuation; premium term means the period during which premiums are payable; valuation date means, in relation to any valuation, the date as at which the valuation is made.

seCtIon II The following documents shall be annexed to every abstract prepared in accordance with this Part of this Schedule: (a) A summary and valuation in Form No.

INS.

57-1 of this Schedule of the policies included at the valuation date in the class of business to which the abstract relates.

(b) A Valuation Balance Sheet in Form No.

INS.

57-2 of this Schedule; and (c) A statement of specimen Policy Reserve Values and Minimum Surrender Values in Form No.

INS.

57-3 of this Schedule, and every such abstract shall show 1.

The valuation date.

2.

The general principles and full details of the methods adopted in the valuation of each of the various classes of insurance and annuities shown in Form No.

INS.

57-1 of this Schedule including statements on the following matters (a) whether the principles were determined by the instruments instituting the insurer or by its articles of association or other rules, or, if not how the principles were determined; (b) the method by which the net premiums have been arrived at and how the ages at entry, premium terms and maturity dates have been treated for the purpose of the valuation; (c) the methods by which the valuation age, period from the valuation Rev.

2012] Insurance CAP.

487 197 date to the maturity date, and the future premium terms, have been [Subsidiary] treated for the purpose of the valuation; (d) the rate of bonus taken into account where, by the method of valuation, denite provision is made for the maintenance of a specic rate of bonus; (e) the method of allowing for (i) the incidence of the premium income; and (ii) premiums payable otherwise than annually; (f) the methods by which provision has been made for the following matters, namely (i) the immediate payment of claims; (ii) future expenses and prots in the case of limited payment poli- cies and paid-up policies; (iii) the reserve in respect of lapsed policies, not included in the valuation, but under which a liability exists or may arise; and (iv) payment of benets or waiver of premiums during disability (a) in operation at the valuation date; and (b) not in operation at that date, and whether any reserves have been made for the matters aforesaid; (g) whether under the valuation method adopted any policy would be treated as an asset, and what steps have been taken to eliminate any such asset from the valuation; (h) a statement of the manner in which policies on under-average lives and policies subject to premiums which includes a charge for climatic, military or other extra risks have been dealt with; and (i) the currency in which the valuation is made and the basis of conversion into that currency of the value of liabilities in other currencies; and what provision, if any, has been made for possible increase of liability arising from uctuations of the rate of exchange.

3.

The tables of mortality, sickness and accident used, and the rate of interest assumed, in the valuation.

4.

The proportion which that part of the annual premiums reserved as a provision for future expenses and prots bears to the total of the annual premiums, separately specied in respect of insurances with immediate prots, with deferred prots, and without prots.

CAP198.

487 Insurance [Rev.

2012 [Subsidiary] 5.

The average rates of interest earned by the assets whether invested or un-invested constituting the relevant statutory fund for each of the three years preceding the valuation date.

6.

The basis adopted in the distribution of surplus as between the insurer and policy owners, and whether that basis was determined by the instruments constituting the insurer, or by its articles of association or under rules, or if not, how the basis was determined.

7.

The general principles adopted in the distribution of surplus among policy owners, including statements on the following matters (a) whether the principles were determined by the instruments constituting the insurer, or by its articles of association or other rules, or, if not, how the principles were determined; (b) the number of years premiums to be paid, period to elapse, and other conditions to be fullled, before a bonus is allotted; (c) whether the bonus is allotted in respect of each years premiums paid, or in respect of each calendar year or year of insurance or, if not, how the bonus is allotted; and (d) whether the bonus vests immediately on allocation or, if not, the conditions of vesting.

8.

The total amount of surplus arising during the inter-valuation period including surplus paid away and sums transferred to reserve funds or other accounts during that period, and the amount brought forward from the preceding valuation (to be stated separately) and the allocation of that surplus (a) to interim bonus paid; (b) among policy owners with immediate participation, giving the number of the policies which participated and the sums insured under the policies (excluding bonuses); (c) among policy owners with deferred participation, giving the number of the policies which participated and the sums insured under the policies (excluding bonuses); (d) to shareholders or to shareholders accounts (any such sums passed through the accounts during the inter-valuation period to be separately stated); (e) to every reserve fund, or other fund or account (any such sums passed through the accounts during the inter-valuation period to be separately stated); and (f) as carried forward unappropriated.

Rev.

2012] Insurance CAP.

487 199 [Subsidiary] 9.

Specimens of bonuses allotted as at the valuation date to policies for one thousand shillings (a) for the whole term of life effected at the respective ages of 20, 30 and 40, and having been in force respectively for ve years, ten years and upwards at intervals of ten years; (where different rates of bonus are allotted to policies under which the premiums are payable for a limited term only, similar specimen bonuses shall be shown for policies having premium terms of ten and twenty years respectively); and (b) for endowment insurances effected at the respective ages of 20, 30 and 40, for endowment terms of fteen, twenty and thirty years and effected at age 20 for an endowment term of forty years, and having been in force respectively for ve years, ten years and upwards at intervals of ten years, together with the amounts apportioned under the various manners in which the bonus is receivable; 10.

Where bonuses are allotted as reversionary additions to the sums insured under policies, a statement of the basis and conditions under which those bonuses may be surrendered for cash.

11.

A statement in Form No.

INS.

57-3 of this Schedule of specimen policy reserve values held or required to be held according to the methods adopted in the valuation, and specimen minimum surrender values in respect of which life assurance policies for one thousand shillings with premiums payable throughout life effected at the respective ages of 20, 30, 40 and 50, and immediately on payment of the rst, second, third, fourth, fth, sixth, seventh, eighth, ninth, tenth, fteenth and twentieth annual premium, with similar specimen policy reserve values and specimen surrender values in respect of whole life assurance policies subject to premiums payable for twenty years and of endowment assurance policies maturing at age 55.

12.

A statement showing how the liability under any disability clause in a policy has been determined in the valuation with full information of the tables of sickness or accident rates used for the purpose.

CAP200.

487 Insurance [Rev.

2012 [Subsidiary].

12).

Net Liability elow b ) and rb ted a IC Net early nd Y emiums.

57(1) ( I Pr ases b on on early I emiums t Ofce Y Pr alua V.

All amounts in thousands of shillings T ed Bonuses A Sums Insur Net early emiums POLICIES AS Y Pr ness on II THE us tsb se alua e mi CV OF early e Ofce YrB-FORMS for PT nsuran es AR TION I ICI P ol erm Pt Bonuses ALUA the V ong l of ed of AND Sums Insur Y lass ulars IC Ct ar P No.

of Policies SUMMAR ts ots I ots rof P th ots I.

.

w es.

.

.

.

.

C.

.

es es C.

.

C es (sC nsuran nsuran II.

ed participation in pr al nsuran et ot In nsuran er: t al I.

57-1 ot al al t ot ot ith immediate participation in pr ithout participation in pr ns INSURANCE POLICIES For whole term of life.

.

.

.

ith deferr For whole term of life.

.

.

.Others (to be specied).

.

.Extra premiums.

.

.

.

.

t For whole term of life others to be Others (to be specied) Extra premiums t.

Ion oup 1W oup 3W orm Gr Others (to be specied).

.

.

.

Extra premiums.

.

.

.

.

oup 2W Deduct reinsurances.

.

.

.Net Insurance.

.

.

.

.

.

Gr specied f Name of Insur Deduct reinsurances.

.

.

.Net Insurances.

.

.

.

.

Gr Rev.

2012] Insurance CAP.

487 201 [Subsidiary].

12) Net Liability ) and rb Net early emiums.

57(1) ( Y Pr early emiums Ofce Y Pr All amounts in thousands of shillings.

.

ed Bonuses T Sum Insur A Net early emiums Y Pr POLICIES AS ness I ms us u THE b mi e early eC OF Ofce YrP TION nsuran I erm Ofce Bonuses ALUA tV - ong ed l AND Sums of Y Insur lass Actuary C SUMMAR No.

of Policies.

.

) ts I (s Contd.

rof.

.

) - ( P es I.

.

.

t es.

.

.

I thout o be specied) es es Contd.

ICI II nnu ( ICI t ( ol wIaP es ol eCP nnu et Can.

57-1 er: ther al al o ot ot : ns nsuran nsuran tT.

III et et non Date n al al ot orm ot oup 4Other policies (Tt oup 5Annuities on Lives otal of the results after deduction of reinsurances f Name of Insur Deduct reinsurances.

.

.

.

t Gr Deduct reinsurances.

.

.

.

Gr Immediate annuities on lives Deferred annuities.

.

.

.

Others (to be specied).

.

.

Deduct reinsurances.

.

.

.

T CAP202.

487 Insurance [Rev.

2012 [Subsidiary] NOTES 1.

Policies without participation in prots but with a guaranteed rate of bonus shall be shown separately in Group 3.

2.

When any adjustments have been made in the valuation, details of the adjustments shall be specied separately in respect of each group in this form.

3.

Ofce and net premiums and the values of the latter shall be shown after abatements made by the application of bonus.

4.

Policies valued on different valuation bases should be grouped separately.

form no.

Ins.

572 VALUATION BALANCE SHEET All Amounts in Kenya Shillings Name of Insurer: As at 31st December, 19 Class of Business Bond Industrial Ordinary Superann- Total Investment Life Life uation Net Liability as shown in 1 Form INS.

571.

.

Surplus.

.

.

2 TOTAL (1+2).

3 Insurance Fund as per 4 Revenue Account.

.

56 Deciency if any.

.

.

TOTAL (4+5).

Date: Actuary Rev.

2012] Insurance CAP.

487 203 [Subsidiary] 50 ender , 19 y alue ntr Minimum Surr V Actuary eta st December ge alue 31 a Reserve V.

A Amounts in Kenya Shillings 40 ender alue All y Minimum Surr V aluation as at ntr eta ALUE UNDER V ge a alue Reserve V 30 ender y alue ntr Minimum Surr Veta.

1,000 h ge sa alue Reserve V for AND MINIMUM SURRENDER y IC ol 20 ALUE Py ender alue V ntr Minimum Surr Ve VE ta ge a alue RESER Reserve V Vemiums SPECIMEN POLICY ears Pr Paid.

573 ns er:.

Io Number of Yn orm f Name of Insur 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

15.

20.

Date: CAP204.

487 Insurance [Rev.

2012 [Subsidiary] (s.

57 (3) and r.

13) FIFTH SCHEDULE ProVIsIons relatIng to the PreParatIon of statements of long-term InsuranCe busIness Part I1.

For the purposes of this Schedule extra premiums means a charge for any risk not provided for in the minimum contract premium; net premiums means the premiums for which credit is taken in the valuation in connection with which any statement is prepared; valuation date means, in relation to any valuation, the date as at which the valuation is made.

2.

Statement prepared in terms of section 57 (3) of the Act shall be prepared, so far as practicable, in tabular form and shall be identied by numbers and letters corresponding with the provisions of Part II of this Schedule.

3.

Except with respect to rates of premium or contribution, items in statements prepared under this Schedule shall be shown to the nearest shilling.

4.

Extra premiums where shown separately in Form No.

INS.

57-1 in the Fourth Schedule shall not be included in statements prepared under this Schedule.

5.

Every statement prepared under this Schedule shall be signed by the actuary making the investigation in connection with which it is prepared.

6.

Statements shall be prepared both for the total business before deduction in respect of reinsurances of the risks of the insurer on proportionate basis, and for those reinsurances.

7.

Where the rates of ofce premiums required to be shown in any statement prepared under this Schedule are the same as the rates shown in any statement previously so prepared and submitted to the Commissioner of Insurance, it shall be sufcient to refer to the rates so shown in such manner as to enable the Commissioner to ascertain the required information.

Part II The statements required to be prepared under this Part are the following: 1.

Statements as to policies issued in Kenya, separately prepared in respect of policies with and without participation in prots, showing Rev.

2012] Insurance CAP.

487 205 [Subsidiary] (a) in relation to policies for the whole term of life, the rates of ofce premiums charged, in accordance with the tables in use, for new policies giving the rates for decennial ages at entry from 20 to 70 inclusive; (b) in relation to endowment insurance policies, the rates of ofce premiums charged, in accordance with the published tables in use, for new policies with original terms of ten, fteen, twenty, thirty, and forty years giving the rates for ages at entry 20, 30 and 40, but excluding policies under which the ages at maturity exceed 60; (c) in relation to policies specied in sub-paragraphs (a) and (b) of this paragraph under which a continuous disability benet is granted, the ofce premiums for that benet under new policies, and the conditions which must be fullled before a continuous disability benet (i) is allowed; and (ii) ceases to be allowed; and (d) in relation to sinking fund policies the rates of ofce premiums charged in accordance with the published tables in use for new policies with original terms of 10, 15, 20 and 30 years: Provided that, in the case of industrial life policies, there shall be shown, in lieu of the rates of ofce premiums charged as specied in the foregoing items, the sums insured by new policies, in accordance with the published tables in use, in return for xed weekly and monthly ofce premiums and in addition the sums insured for ages at entry 1, 5, 10 and 15.

2.

Statements separately prepared in respect of policies with immediate prots, with deferred prots, and without prots showing in quinquennial groups (a) in relation to policies on single lives for the whole term of life (i) the total amount insured (specifying sums insured and reversion- ary bonuses separately); (ii) the amount per annum, after deducting abatements made by application of bonus, of ofce premiums payable throughout life, and of the corresponding net premiums grouped according to ages attained; and (iii) the amount per annum, after deducting abatements made by application of bonus, of ofce premiums payable for a limited number of years, and, of the corresponding net premiums grouped in accordance with the grouping adopted for the pur- pose of the valuation; CAP206.

487 Insurance [Rev.

2012 [Subsidiary] (b) in relation to endowment insurance policies on single lives (i) the total amount insured (specifying sums insured and rever- sionary bonuses separately), grouped in accordance with the grouping adopted for the purposes of the valuation; and (ii) the amount per annum, after deducting abatements made by application of bonus, of ofce premiums payable and of the corresponding net premiums, grouped in accordance with the grouping adopted for the purposes of valuation; (c) in relation to policies specied in the preceding provisions of this Schedule, under which a continuous disability benet is granted (i) the total amount of continuous disability benet insured under the policies, grouped in accordance with the grouping adopted for the purposes of the valuation; and (ii) the amount per annum, after deducting abatements made by the application of bonus, of ofce premiums payable (including premiums of which payment is, at the valuation date, suspended owing to disability arising from sickness or accident) and the corresponding net premiums, grouped according to the grouping adopted for the purposes of the valuation; and (b) in relation to sinking fund policies (i) the total amount insured (specifying sums insured and reversion- ary bonuses separately), grouped according to the number of complete years from the valuation date to the date of maturity of the policies; and (ii) the amount per annum, after deducting abatements made by application of bonus, of ofce premiums payable, and of the corresponding net premiums, grouped according to the number of years payments remaining to be made: Provided that (a) in relation to endowment insurance policies or sinking fund policies which will reach maturity in less than ve years, and are grouped for the purposes of the valuation according to the years in which the policies will mature for payment, the information required by subparagraphs (b) (i), (c) (i) and (d) (i), above shall be given for each year instead of in quinquennial groups; and (b) where the net premiums in respect of policies for the whole term of life with premiums payable for a limited number of years, or the net premiums in respect of endowment insurance policies, are Rev.

2012] Insurance CAP.

487 207 grouped for the purposes of the valuation otherwise than according [Subsidiary] to the number of years payments remaining to be made, or where the sums insured under endowment insurance policies are grouped for the purposes of the valuation otherwise than according to the years in which the policies will mature for payment or in which they are assumed to mature if earlier than the true year, then, in any such case, the valuation constants and an explanation of the method by which they are calculated shall be given for each group, and, in the case of the sums insured under endowment insurance policies, a statement shall also be given of the amount insured maturing for payment in each of the two years following the valuation date.

3.

Statements in relation to immediate annuities on single lives for the whole term of life and annuities which were originally deferred but which have been entered upon before or on the valuation date, separately prepared in respect of annuities on male and female lives, showing in quinquennial age groups the total amount of those annuities, grouped according to ages attained at the valuation date.

4.

Statements in relation to deferred annuities which have not been entered upon before or on the valuation date, separately prepared in respect of annuities on male and female lives, showing in quinquennial groups (a) the total amount of those annuities, grouped according to the number of years from the valuation date to the date the annuity is to be entered upon, and either (i) the average age obtained by weighting according to the amount of the annuity attained at the valuation date by the prospective annuitants; or (ii) the valuation constants and an explanation of the method by which they are calculated; and (b) the amount per annum of ofce premiums payable and of the corresponding net premiums, grouped according to the number of years payments remaining to be made.

5.

Statements in relation to immediate annuity certain policies showing in quinquennial groups the total amount of those annuities grouped according to the number of years from the valuation date to the date the annuities cease to be payable.

6.

Statements showing in quinquennial groups the amount per annum of continuous disability benets payable at the valuation date in respect of disability of more than one years duration, grouped according to ages attained.

7.

Statements showing the total amount of continuous disability benet paid and premiums waived in each of the ve years immediately preceding the valuation date.

CAP208.

487 Insurance [Rev.

2012 [Subsidiary] SIXTH SCHEDULE (s.

57 (5) and r.

14) regulatIons relatIng to aCtuarIal ValuatIon of lIabIlItIes 1.

The basis of valuation adopted shall be such as to place a proper value upon the liabilities, having regard to the mortality experience among the persons whose lives have been insured by the insurer, to the average rate of interest from investments and to the expenses of management (including commission), and shall be such as to ensure that no policy shall be treated as an asset.

2.

The value placed upon the aggregate liabilities of a statutory fund in respect of policies by reason of the adoption of any basis of valuation shall not be less than it would have been if it had been calculated on the minimum basis in accordance with the provisions of the Seventh Schedule.

3.

The actuary who makes the valuation shall certify whether, in his opinion, the value placed upon the aggregate liabilities of a statutory fund in respect of policies by the valuation is not less than the value which would have been placed upon those aggregate liabilities if it had been calculated on the minimum basis in accordance with the provisions of the Seventh Schedule.

4.

Where the balance sheet of the insurer includes amongst the assets of the long-term insurance business to which a statutory fund relates any sums representing expenses of organisation or extension, or the purchase of business or goodwill or other intangible assets, and the amount of the other assets of that business (after deducting debts due by the insurer in respect of that business) is less than the balance of the revenue accounts, as the case may be, as shown in the balance sheet in respect of that business (a) where the statutory fund relates to one class of long-term insurance business only, the balance of revenue account shall be shown in the appropriate valuation balance sheet as reduced by the amount of the deciency; and (b) where the statutory fund relates to more than one class of long term insurance business, the balances of the revenue accounts in respect of each class of long-term insurance business shall each be shown in the appropriate valuation balance sheet as reduced by a portion of the amount of the deciency, being a portion ascertained by apportioning the amount of the deciency between those revenue accounts so that the amount to be apportioned to each account bears to the amount to be apportioned the same proportion as the balance of that account bears to the sum of the balances of those accounts.

Rev.

2012] Insurance CAP.

487 209 SEVENTH SCHEDULE (s.

58 (3) and r.

15) [Subsidiary] rules for the CalCulatIon of the Value of lIabIlItIes on the mInImum basIs 1.

The rates of mortality used in calculating the liability under a policy shall be rates assumed in accordance with the table below Type of Policy Table 1.

Industrial life KE 2001-03 Tables for Assured Lives Individual Assured Lives 2.

Ordinary Life KE 2001-03 Tables for Assured Lives 3.

Immediate annuities and KE 2001-2003 Tables for Assured Lives deferred annuities after vesting.

Individual Annuitant Lives 4.

Group Life KE 2001-2003 Tables for Assured Lives - Adjusted Group Assured Lives 5.

All other assurances including KE 2001-2003 Tables for Assured Lives deferred annuities during Individual Assured Lives deferment period.

2.

The rates of interest used in calculating the liability under a policy shall be as follows: Type of Policy Rate % 1.

Assurances under registered 6 Gross superannuation schemes.

2.

Assurance other than those under 4 Net registered superannuation schemes including industrial life assurances.

3.

Deferred annuities 5 Gross 4.

Immediate annuities 6 Gross 3.

For the purposes of paragraph (2) of this Schedule Registered means registered under the Income Tax Act.

4.

When for certain types of policies a valuation is done by accumulation with compound interest of the premiums paid, the premiums to be accumulated shall not be less than ninety per centum of ofce premiums and the rate of interest shall not be less than the rate currently paid by the ofce on all withdrawals or surrenders under that plan.

5.

The liability in respect of a policy other than the type of policy referred to in paragraph (4) shall be the difference between the capitalized values as at the valuation date of (a) the reversion in the sum insured, including any reversionary bonuses declared in respect of the policy and still attaching to the CAP210.

487 Insurance [Rev.

2012 [Subsidiary] policy at the valuation date; and (b) the future adjusted net premium, less any reduction of those premiums which may have been granted as a bonus, or obtained by the giving of any valuable consideration according to the contingencies upon which they are respectively payable.

6.

For the purpose of rule 5 adjusted net premiums means the net premium for the policy increased by the difference between the net premium and the net premium that would apply (according to the rate of interest and rates of mortality assumed) if (i) the policy had been issued one year after the actual date of its issue; and (ii) in cases where the premiums are payable for a limited period, the premiums were payable for a period one year less than that limited period; net premium means such premium exclusive of any addition for bonuses, ofce expenses and other charges, as (according to the rate of interest and rates of mortality assumed and the age, at the date of the issue of the policy, of the person whose life is insured) is sufcient to provide for the risk incurred by the company in issuing the policy.

7.

No policy shall be treated as an asset.

Rev.

2012] Insurance CAP.

487 211 [Subsidiary] EIGHTH SCHEDULE (r.

16) aCtuarys CertIfICate I,.

of.

(full name).

being an Actuary duly qualied (business address) in terms of section 2 of the Insurance Act having conducted an investigation in terms of sections 57 and 58 of that Act, do hereby certify as under: (a) that in my opinion the value placed upon the aggregate liabilities relating to the.

in respect of policies (statutory fund) on the basis of valuation adopted by me is not less than what it would have been if the aggregate value had been calculated on the minimum basis prescribed; (b) that necessary steps as required under section 58 (5) (a) were taken; and (c) that I am satised that the value of assets adopted by me are, on the basis of the auditors certicates appended to the balance sheet, fully of the value so adopted.

.

Date Actuary CAP212.

487 Insurance [Rev.

2012 [Subsidiary] NINTH SCHEDULE notes to form nos.

Ins.

59-1 to 59-12 1.

Separate statements need to be furnished in respect of (a) (i) Kenya business and (ii) outside Kenya business; (b) (i) Long-Term business and (ii) General insurance business; (c) (i) Inward reinsurance and (ii) Outward reinsurance business; unless the references on the form indicate otherwise.

2.

Reference may be made to Part A of Third Schedule with regard to Class and Sub-Class of General insurance business.

3.

All premium amounts shall be taken after deduction of return premiums and rebate and shall include extra or additional premiums.

In this context, gross direct premiums shall mean premiums in respect of direct business, and inward reinsurance premiums shall mean amounts of premiums received by way of reinsurances accepted.

Outward reinsurance premiums shall mean amounts of premiums ceded by way of reinsurance.

4.

Amounts of commission which shall include brokerage fee or other remuneration paid to an intermediary shall be shown separately under appropriate headings and not deducted from premium amounts.

5.

Claim amounts shall include claims expenses and amounts of outstanding claims provision shall include provision for incurred but not reported except where required to be shown separately.

6.

Particulars of portfolio transfers made during the year should be furnished in a separate statement.

7.

Care should be taken to ensure that the amounts stated in the various forms in this Schedule are consistent amongst themselves and with those in the revenue accounts.

8.

If the space in any form is inadequate give the required information in a separate statement.

9.

KRC means Kenya Reinsurance Corporation.

10.

Africa Re means African Reinsurance Corporation.

form no.

Ins.

59-1a Rev.

2012] Insurance CAP.

487 213 STATEMENT OF PREMIUM INCOME [Subsidiary] *LONG-TERM INSURANCE BUSINESS *Kenya busIness/outsIde Kenya busIness *(Delete whichever is not applicable) Name of Insurer: Year ending 31st December, 19 Class of Business Bond Industrial Ordinary Superan- Total Invest- Life Life nuation ment Serial Number 01 02 03 04 Gross Direct Premium 1 Inward Reinsurance premium 2 Outward Reinsurance Premium net PremIum (1+2-3) 4 Date: Auditor Principal Ofcer note: Read the notes in the Ninth Schedule to the Insurance Regulations and comply.

CAP214.

487 Insurance [Rev.

2012 [Subsidiary] Medical 08 Insurance 19 Motor Private 07 Motor Private 070 , t 062 I Marin Hull st December rans t 31 06 and ransit 061 Other T ne I ar go All amounts in Kenya Shillings.ear ending m 060 Marine Car Others 052 ty of.

Il 051 ) I 05 Pr ab Industrial BUSINESS)* IAl oducts 050 Pr Liability.

ee Auditor Principal Ofcer OF PREMIUM INCOME INSURANCE BUSINESS Fir 04 Fir 040 and comply Industrial Industrial TEMENT Delete whichever is not applicable eeA GENERAL BUSINESS/OUTSIDE KENY( Fir 03 Fir 030 ST A Domestic Domestic (KENY ng I 021 neer 02 Others I ng e Car 020 viation 01 010 A viation A123456789 10 11 B.

59-1 er: Y ns.

I (5+6).

(8+9).

o Class of Business n AL AL : Read the notes in the Ninth Schedule to the Insurance Regulations orm OT OT ote f Name of Insur Sub-Class of Business Gross direct premium.

Inward reinsurance premium.

.

.Outward reinsurance premium.

.

.

Net premium (1+2-3).

Premium reserved at the beginning of the yearearned premium.

any other.

.T Premium reserved at the end of the year .earned premium.

Any other.

.

T Earned premium for theyear (4+7-10).

Date: n Rev.

2012] Insurance CAP.

487 215 [Subsidiary] otal Grand T 13 19 Any other 123 , Live- stock 122 st December ellaneous 12 31 CsI Crop 121 m All amounts in Kenya Shillings.ear ending Bond 120 s0 ork ork 11 W men Compen- sation 11 W Compen- sation ) glary 102 BUSINESS)* Bur all risks A others 10.

heft t 101 OF PREMIUM INCOME Fidelity Guarantee Auditor Principal Ofcer INSURANCE BUSINESS and comply TEMENT ransit 100 A Cash in T ST Delete whichever is not applicable GENERAL BUSINESS/OUTSIDE KENY ( A Health 091 (KENY and Personal Accident 09 Personal 090 Accident sickness - - Motor Commer 08 Motor Commer 080 cial cial ) Contd.

123456789 10 11 ( B.

59-1 er: Y ns.

I (5+6).

(8+9).

on AL AL : Read the notes in the Ninth Schedule to the Insurance Regulations orm OT OT ote f Name of InsurClass of Business Sub Class of Business Gross direct premium.

Inward reinsurance premium.

.

.

Outward reinsurance premium.

.

.

Net premium (1+2-3).

Premium reserved at the beginning of the year earned premium.

Any other.

.

T Premium reserved at the end of the year.

earned premium.

Any other.

.

T Earned premium for the year (4+7-10).

Date: n CAP216.

487 Insurance [Rev.

2012 [Subsidiary] e1.

al C IC 08 ed nsuran mI 19 L.N.

51/201, or te a ot IV 07 070 mr Motor Private P st December Marine Hull 062 31 t All amounts in Kenya Shillings.

I rans 06 ransi 061 t Other T ear ending nd a go ne I 060 ar Marine Car YEARS m Others 05 ty I of.

lI 05 Pr 051 ab I Industrial ) l BUSINESS)* A oducts 050 Pr Liability al Auditor Principal Ofcer Ie re I 04 Fir 040 f Industrial.

ndustr NCIDENTS OCCURRING IN PREVIOUS I mply re IC eI 03 Fir 030 f omest Domestic BUSINESS/OUTSIDE KENY Delete whichever is not applicable dA (* ng I Others 021 neer 02 I ng e Car 020 OF INCURRED CLAIMS on Ita 01 VI viation aA TEMENT 010 A123456789 10 11 12 13 14 15 16 ness of: I1) us end.

.

b at ear.

.

of Y ear Y er: Ylass ear.

.

ear CY ear.

.

Y ear.

.

Y ect business outstanding Yd the notes in the Ninth Schedule to the Insurance Regulations and co Sub-Class of Business oss dir current :: Rea ote Form No.

INS.

59-2 ST (KENYName of Insur Gr Claims paid.

.Claims current year.

.

the proceeding year.

Incurred claims (1+2-3) Inward reinsurance business: Claims paid.

.

Claims outstanding at the end of: the preceding Incurred claims (6+7-8) Outward reinsurance business:Claims paid.

.

Claims outstanding at the end of: Current Preceding Incurred claims (9+10-1Net Business Claims paid.

.

Claims outstanding at the end of:Current The preceding Incurred claims (13+14+15) Date: n Rev.

2012] Insurance CAP.

487 217 al [Subsidiary] 19 ot , t rand g 13 st December 31 Any other 123 ear ending 12 Livestock 122 All amounts in Kenya Shillings.

ellaneous Cs op I 121 YEARS m Cr Bond 120 - - ssK ens on 10 or en PI1t 11 wm om a orkmen CW Compen- sation Principal Ofcer ) ) glary 102 Bur all risks and others BUSINESS* heft Auditor At 10 101 INCIDENTS OCCURRING IN PREVIOUS Fidelity Guarantee ransit 100 Cash in T Delete whichever is not applicable.

(* 091 dent Health ersonal CCI 09 BUSINESS/OUTSIDE KENY Pa and 090 OF INCURRED CLAIMS A Personal Accident sickness - KENY cial ( or al TEMENT ot ommer I 08 080 AmC Motor Commer ST C123456789 10 11 12 13 14 15 16 ) ness Contd.

I of: ( us b1) end of at ear.

.

ear.

59-2 er: Ylass Y ear.

.

CY ns ear.

.

ear.

.

ear.

.

the notes in the Ninth Schedule to the Insurance Regulations and comply.

I ect business YYYo outstanding preceding Yn : Read oss dir Current orm ote f Name of InsurGr Claims paid.

.

Claims current year.

.

the preceding year.

Incurred claims (1+2-3) Inward reinsurance business: Claims paid.

.

Claims outstanding at the end of: The preceding Incurred claims (6+7-8) Outward reinsurance business:Claims paid.

.

Claims outstanding at the end of: Current Preceding Incurred claims (9+10-1 Net Business Claims paid.

.

Claims outstanding at the end of:Current The Incurred claims (13+14+15) Date: n CAP218.

487 Insurance [Rev.

2012 [Subsidiary] form no.

Ins.

59-3a STATEMENT OF INCURRED CLAIMS LONG-TERM INSURANCE BUSINESS (Kenya busIness/outsIde Kenya busIness)* (*Delete whichever is not applicable) All amounts in Kenya Shillings Name of Insurer: Year ending 31st December, 19 Class of business Bond Industrial Ordinary Superannuation Total Investment Life Life Serial Number 01 02 03 04 Gross direct business Claims paid.

.

.

.

.

.

.

.

.

Claims outstanding as at the end of: 1 Current year.

.

.

.

.

.

2 Preceding year.

.

.

.

.

.

3 Incurred claims (1+2-3) 4 Inward reinsurance business.

.

.

.

.

.

Claims paid.

.

.

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.

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.

.

.

.

.

.

.

.

.

5 Claims outstanding as at the end of: Current year.

.

.

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.

.

.

.

.

.

6 Preceding year.

.

.

.

.

.

.

.

.

.

Incurred claims (5+6-7).

.

.

.

.

.

78 Outward reinsurance business Claims paid.

.

.

.

.

.

.

.

.

.

.

9 Claims outstanding as at the end of: Current year.

.

.

.

.

.

.

.

10 Preceding year.

.

.

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.

.

.

.

11 Incurred claims (9+1011).

.

.

.

.

.

12 Net Business Claims paid (1+59).

.

.

.

.

.

.

.

13 Claims outstanding at the end of:.

.

Current year (3+711) Preceding year (2+610).

.

.

.

15 Incurred claims (4+812) or (13+14 15).

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

16 Date: Auditor Principal Ofcer note: Read the notes in the Ninth Schedule to the Insurance Regulations and comply.

e Rev.

2012] Insurance CAP.

487 219 al C IC 08 ed [Subsidiary] m nsuran I te or a ot IV 07 070 mr Motor Private 19 P , t 062 I Marine Hull st December rans t 31 06 061 and Other ransit ne TI YEARS ear ending ar All amounts in Kenya Shillings.

m go 060 Marine Car Others 052 ) of.

ty Il 051 BUSINESS)* I 05 Pr ab Industrial INSURANCE BUSINESS AIl oducts 050 Pr Liability al Ie re I 04 040 f Fir ndustr I Industrial Delete whichever is not applicable IC e BUSINESS/OUTSIDE KENY (* re AI 03 030 f omest Fir INCURRED CLAIMSGENERAL d Domestic AL (KENY ng OT I 021 OF INCURRED CLAIMSINCIDENTS OCCURRING IN PREVIOUS T Others neer 02 AND I ng e TEMENT Car 020 A ST on Ita 01 viation 010 VI Aa12345678 10 end end end ness I the the the us at at at b er: Y ear: of Y.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

INS.

59-3B lass No C outstanding outstanding outstanding Sub-Class of Business laims paid.

.

.

C orm f the year.

ncurred claims (4+5) f Name of Insur Incidents Occurring During the Current Gross direct business Claims paid.

.

.

.

.

.

.

Claims o Incurred claims (1+2) Inward reinsurance business: Claims paid.

.

.

.

.

.

.

Claims of the year.

I Outward reinsurance business: Claims of year.

Incurred claims (7+8) Net business: Claims paid (1+4-7) CAP220.

487 Insurance [Rev.

2012 [Subsidiary] al 19 , ot 13 t st December Any other 123 31 Livestock 122 ear ending ellaneous 12 C All amounts in Kenya Shillings.

s op I 121 m Cr Bond 120 YEARS - - ssK ens on or en PI 11 t0wm om a orkmen 11 CW Compen- sation glary 102 Bur all risks and others heft 10 ) t 101 BUSINESS) A Fidelity Guarantee INCIDENTS OCCURRING IN PREVIOUS ransit 100 Cash in T 091 dent 09 Health ersonal CCI BUSINESS/OUTSIDE KENYDelete whichever is not applicable Pa and 080 A Personal Accident sickness OF INCURRED CLAIMS - cial or al 08 TEMENT ot ommer CI Motor 080 AmC Commer ST 123456789 10 .) ness Contd I ( us.

.

.

.

.

b 3B of er: Y lass C Sub-Class of Business No.

INS.

59 orm ear: ncurred claims (1+2) laims paid.

.

.

.

.

.

.

.

.

.

.

.

f (KENY (*Name of Insur Incidents Occurring During the Current YGross direct business:Claims paid.

Claims outstanding at the end of the year.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

I Inward reinsurance business:C Claims outstanding at the end of the year.

.

.

.

.

.

.

.

.

.

.

.

.

.

Incurred claims (4+6).

Outward reinsurance business:Claims paid.

.

.

.

.

.

.

.

.

.Claims outstanding at the end of year .Incurred claims (7+8).

.

.

.

.

.

.

.Net business: Claims paid (1+4-7) Rev.

2012] Insurance CAP.

487 221 [Subsidiary] e al C IC 08 ed nsuran mI te or a 19 ot IV 07 070 , mr Motor Private PtI Marin Hull 062 st December rans t 31 06 061 and ransit Other T ne I YEAR ar All amounts in Kenya Shillingsear ending m go 060 Marine Car Others 052 THE CURRENT ty Il of.

I 05 Pr 051 ab I BUSINESS)* ) l Industrial INSURANCE BUSINESS A oducts 050 Pr Liability Auditor Principal Ofcer al.

Ie re I 04 040 f Fir ndustr I Industrial and comply e re IC I 03 030 BUSINESS/OUTSIDE KENY Delete whichever is not applicable f Fir A (* omest INCURRED CLAIMSGENERAL d Domestic AL (KENY - 021 OT T neer I 02 Others ng e OF INCURRED CLAIMSINCIDENTS OCCURRING IN AND Car 020 ng I on I TEMENT tAa 01 viation 010 VI A ST a3 .) 11 12 1 14 15 16 17 Contd ness I us bf er: Yo.

.

.

.

.

.

.

lass No.

INS.

59-3B( C Sub-Class of Business 100.

.

.

.

.

.

: Read the notes in the Ninth Schedule to the Insurance Regulations orm rovision for incurred but otal incurred claims (10+ 1+72).

.

otal Incurred Claims (13+14) arned premium for the ) 16 ote ncident occurring in the 15 f Name of Insur Claims outstanding at the end of the year (2+5-8)P not reported claims T1I previous years: Net incurred claims.

T.

.

.

.

.

.

.

.

.

.

.

.

.

E year.

.

Incurred claims ratio ( Date: n CAP222.

487 Insurance [Rev.

2012 [Subsidiary] al ot 13 t 19 , Any other 123 st December Live- stock 122 ellaneous 12 31 CsI op m Cr 121 year ear ending All amounts in Kenya Shillings Bond 121 - sKs en on 1 urrent PI or en tC om a 120 wms1 orkmen the CW Compen- sation nI ng glary Auditor Principal Ofcer I ) Bur all risks 102 urr BUSINESS) CC INSURANCE BUSINESS A heft 10 ot Fidelity 101.

dents Guarantee CI n 100 and comply I Cash in ransit ms TI la Delete whichever is not applicable C BUSINESS/OUTSIDE KENY(* dent 09 Health 091 A ersonal CCI urred INCURRED CLAIMSGENERAL PaC AL (KENY nI OT 090 of T Personal Accident AND - - tement or a ot al 08 080 st m ommer I Motor CC Commer cial 11 12 13 14 15 16 17 smi ness aIl us cbd er: Yf eorr.

.

.

.

.

.

.

uc lass nCi1+12).

.

No.

INS.

59-3B Sub-Class of Business l : Read the notes in the Ninth Schedule to the Insurance Regulations a 100.

.

.

.

.

.

t ) ote orm o otal Incurred Claims 15 16 f Name of Insur Claims outstanding at the end of year (2+5-8)Provision for incurred but not reported claims T (10+1 Incident Occurring in theprevious years: Net incurred claims.

T (13+14).

.

Earned premium for theyear.

.

Incurred claims ratio ( Date: n Rev.

2012] Insurance CAP.

487 223 e al C [Subsidiary] IC 08 ed : m nsuran I 19 te , or a ot IV 07 070 mr Motor Private P st December t Hull 062 31 I Marine rans t 06 and ransit 061 ear ending Other T ne All amounts in Kenya Shillings I ar m go 060 Marine Car Others 052 ty I of.

Auditor Principal Ofcer l 051 ) I 05 Pr ab Industrial I BUSINESS)* lA oducts Liability 050 Pr.

WRITING BALANCES y al lIp re emI 04 040 of Fir c ndustr d INSURANCE BUSINESS I Industrial na OF UNDER s IC noei re tI 03 a Delete whichever is not applicable f Fir 030 l BUSINESS/OUTSIDE KENY (* omest u GENERAL d Domestic g TEMENT AeARe ng c ST I 021 na (KENY Others r neer 02 uIs ng neI Car 020 eht on oIttea 01 010 l VI viation uaAdeh123456789 10 11 12 cShtniNeht ness nIi us funded: sebt is ofnoe er: Yh lass which (net): 1).

.

.

.

.

.

.

.

.

tC.

.

.

.

.

.

.

dae paid R No.

INS.

59-4 Business otal (8+9).

.

: orm ) Business which is not Funded: otal outgo (2+3+4).

) otal outgo (3+4+10).

.

.

.

.

.

.

ote A ncurred claims (net).

.

Bf Name of InsurSub-Class of Business ( Earned premiums (net) I Commission (net).

.

.

Management expenses T Underwriting surplus or decit (1-5).

( Net premiums written Claims Incident occurring in previous year.

.

.

.

.

current year.

.

.

.

.

.

.

.

.

.

.

TT Increase or decrease in the fund (7-1 Date: n CAP224.

487 Insurance [Rev.

2012 [Subsidiary] al ot 13 19 t , Any other 123 st December Live- stock 122 31 12 ellaneous C op sI Cr 121 m All amounts in Kenya Shillings.ear ending 120 Bond - sKs en on 1PI0 or om t 11 w men sa 1 ork men sation CW Compen- glary others 102 Auditor Principal Ofcer ) Bur all risks BUSINESS)* A heft 10 Fidelity 101 t Guarantee WRITING BALANCES.

INSURANCE BUSINESS Cash in ransit 100 OF UNDER T BUSINESS/OUTSIDE KENYDelete whichever is not applicable Health 091 TEMENT GENERAL A (* A dent 09 and ST ersonal CCI (KENY Pa 090 Personal Accident sickness - - or al ot ommer CI 08 Motor cial 080 mC Commer 123456789 10 11 12 .) ness Contd I us b of er: Y1).

.

.

.

.

.

lass C Sub-class of Business No.

INS.

59-4 ( ) Business which is not ) Business which is funded: otal (8+9).

.

.

.

.

.

.

.

: Read the notes in the Ninth Schedule to the Insurance Regulations and comply orm A ncurred claims (net).

otal outgo (2+3+4).

.

.

.

nderwriting surplus or B otal outgo (3+4+10).

OTE f Name of Insur ( funded: Earned premiums (net), I Commission (net).

Management expenses.

.

TU decit (1-5).

.

.

.

.

.

( Net premiums writtenClaims paid (net) Incident occurring in previous year.

.

.

.

.

.

.

.

current year.

.

.

.

.

.

.

TT Increase or decrease in the fund (7-1 Date: N Rev.

2012] Insurance CAP.

487 225 al [Subsidiary] ot13 9t 19 , , otal Any other123 T (3+6) (9) st DecemberLive-122 st December ness 1 stock 31 I2 us (8) ellaneous b Cop Outside Kenya s al ICr121 ot (2+5) mt All amounts in Kenya Shillings.ear ending All amounts in Kenya Shillingsear ending Bond120 (7) -s Kenya (1+5) Ksenon1 PI0 oromt11 wmensa 1ork men sation C WCompen- otal (6) ness TI (4+5) us glary Auditor Principal Ofcer b 02 e )Burall risksothers EXPENSES C BUSINESS)* Outside (5) A nsuran Kenya 0101 I heftFidelity tGuarantee eneral (4) WRITING BALANCES g.

Kenya INSURANCE BUSINESSCash inransit100 AND MANAGEMENT T EXPENDITURE otal (3) ness T OF UNDER I (1+2) us b 91 Delete whichever is not applicable Health e GENERAL BUSINESS/OUTSIDE KENY(* ACTUAL C TEMENTAdent (2) AersonalCCI09and nsuran Outside Kenya ST (KENY Pa090 OF COMMISSION I Personal sickness erm t Accident - - TEMENT ong (1) - Al Kenya oral ST otCI08 cial080 mommerMotor C Commer 23456 789101112.

.

.

.

.

.

.) oss ges ness ContdI.

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ater.

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us f.

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.W.

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b , ge.

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of er: Y1).

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.

okerage on Gr ges.

.

lass er: Y CSub-class of Business elfare Expenses (specify).

.

.

.

Other Expenses (Specify) Fees.

.

.

s Fees.

.

.

Repairs Electricity Insurance Premium.

No.

INS.

59-4 (otal (8+9).

.

.

.

.

.

.

.

: Read the notes in the Ninth Schedule to the Insurance Regulations and comply W ORSFees orm) Business which is not otal outgo (2+3+4).

.

.

.nderwriting surplus or ) Business which is funded:otal outgo (3+4+10) .OTE No.

INS.

59-5 ect business ravelling Expenses.

.

.

.

.

.

.

.

.

.

f Ancurred claims (net) .Bf Name of Insur( funded: Earned premiums (net),ICommission (net) .Management expenses.

.TU decit (1-5).

.

.

.

.

.

( Net premiums writtenClaims paid (net)Incident occurring in previous year.

.

.

.

.

.

.

.

current year.

.

.

.

.

.

.

TT Increase or decrease in the fund (7-1Date:N Commission/br T Auditors Actuary orm.

f Name of Insur A dir B.

Management Expenses Salaries.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

Contribution to Staf Superannuation Provident Fund Staf DIRECT Legal Expenses.

.

.

Medical Fees (for Long-term Business).

OfceRent.

.

.

Ofce Machines (Specify) Hire and Maintenance Char Depreciation Char Repair Char CAP226.

487 Insurance [Rev.

2012 [Subsidiary] 19 , otal T (3+6) (9) st December ness 31 I us (8) b Outside Kenya al (2+5) ot All amounts in Kenya Shillingsear ending t Kenya (1+5) (7) ness otal (6) IT us (4+5) be EXPENSES C nsuran Outside (5) I Kenya eneral g Kenya (4) AND MANAGEMENT EXPENDITURE ness otal (3) IT us (1+2) Auditor Principal Ofcer b ACTUAL eC OF COMMISSION nsuran Outside Kenya (2) I erm t TEMENT - A ong (1) ST l Kenya.

.

.

.) ges Contd telex/cable f.

.

.

.

.

.

.

.

.

.

ges.

.

er: Y Advertising.

.

.

.

.

ges.

.

including ehicles.

.

.

V No.

INS.

59-5( Actual Expenditure (A)+(B) Postage elephone.

.

.

.

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.

.

.

.

.

.

.

.

.

otal Expenses of Management otal TTT orm.

f Name of Insur Publicity and Printing and Stationary.

.

.

Bad debts written of Motor hire and maintenance char depreciation char Repair char Insurance premium.

.

.

.

.

.

Other expenses (Specify).

.

.

C Date: Rev.

2012] Insurance CAP.

487 227 [Subsidiary] FORM No.

INS.

59-5(Contd.) NOTES 1.

Read the notes in the Ninth Schedule to the Insurance Regulations and comply.

2.

The columns (1), (4) and (7) refer to Kenya Business and columns (2), (5) and (8) refer to Outside Kenya Business.

3.

The expenses wherever incurred should be shown under the appropriate column (1) or (2) and (4) or (5) depending on whether they pertain to Kenya business or Outside Kenya business.

Accordingly, details of expenses incurred in Kenya pertaining to Outside Kenya business or vice versa and any apportionment of common expenses indicating the basis of such apportionment should be furnished in a separate statement.

CAP228.

487 Insurance [Rev.

2012 [Subsidiary] es 19 I Cla (17) , er -ims Vo 19 Cee- r , give the Pr miums (16) ms I ears st December la y.

31 C Cla (15) and hree -ims t 19 ng ums Ie- ear ending I ed Pr (14) All amounts in Kenya Shillings rem C miums P re ePC for Cla -ims (13) nsuran 19 Ie- e Pr (12) r miums - 1) Rate of oker age % (1 Br TIES ee- ) C sit Pr.

mum and (10) Mini- TREA BUSINESS* Depo- mium A nsuran erms Ite em- r ot Com- mum ium (9).

Pr ission Maxi- Pr Rate % INSURANCE BUSINESS* e- ARD REINSURANCE* Com- Mini- mum Pr mium (8) ission Rate% Principal Ofcer and comply (7) Incep- tion Date ARD/OUTW Delete whichever is not applicable BUSINESS/OUTSIDE KENYTERM/GENERAL (* TICULARS OF REINSURANCE INW A ty per (6) AR mum Event P rea It ax mount KENY LONG e ts aCImmI per Risk (5) l nsuran I - er per centage or of (4) Number Lines t , both the percentages and amounts of net retention and maximum treaty limit need to be mentioned.

nI of any one (3) Even et tCne eturn Pr es any one (2) r Risk ype of eaty Tr er: YT (1) ith reference to net retention under columns (2) and (3), attach a separate statement of maximum expected loss in respect of each treatyferent layers of cover under a non-proportional treaty need to be mentioned separatelyif it is for a specied period (for long-term insurance business).respect of non-proportional treaties.In case the estimated reinsurance premium for the current year is expected to be more than 25 percent higher or lower than the preceding yearestimated in amount in a separate note stating the reasons for the increase or decrease.

W Sub- class of Busi- ness 2.

3.

For a quota share treaty 4.

Dif 5.

Under column (7), period for which a treaty is applicable should be stated only if the treaty is for not for twelve months (for General insurance business) or 6.

Under column (8) and (9), the commission and prot commission rates are required in respect of proportional treaties and minimum and maximum rates in 7.

Under columns (12) to (17), give the amounts of reinsurance premiums paid and claims recoveries made under the treaty for the preceding three years.

No.

INS.

59-6 of : 1.

Read the notes in the Ninth Schedule to the Insurance Regulations ORM Class Busi- ness ote F Name of Insur Date: n Rev.

2012] Insurance CAP.

487 229 [Subsidiary] es 9ICla(17) , er-ims fV 19 o the o19 , tCcee- outside er, give the sp Prmiums (16) e state ms r Iears st December.

risks n lay i1C st December m please 1) hreeCla-ims(15) 31 u so, andt mi 19 e If r ng p umsIe- In ear ending edPr (14) eaty includes i remCmiums a risks? All amounts in Kenya Shillingsre rt P ear ending eeP sc CforCla-ims(13) ty If the tr Kenya also, is it possible toa such basis (19 rea nsuran t Ie- ePr (12) r the (10) miums All amounts in millions of Kenya Shillings n on your ogramme I Since when einsurance - ng r pr ) It Rate of okerage % (1a Br ICIP e in t ) eaty (9) ar centage r TIESee- TING ) P Shar T )Csit Pr.

As Per mum and (10) ( Mini- TREA BUSINESS*Depo- mium Ansuranerms TICIP.

It nsurer eem- AR I rot Com-mumium (9).

TICULARS ABOUT eholders (8) Prission Maxi- Pr Rate % AR P nd comply INSURER BUSINESS* Shar Funds INSURANCE BUSINESS*e- ARD REINSURANCE* ARD REINSURANCE*Com-Mini-mum Prmium (8) TIES ission Rate% Principal Ofcer and comply ed, TREA ess of (7) tion (7) AND INSURERS P Delete whichever is not applicable Addr egister r ARD/OUTWDelete whichever is not applicableIncep-Date ARD/OUTW Ofce BUSINESS/OUTSIDE KENYTERM/GENERAL(* TICULARS OF REINSURANCE INWAtyper (6) BROKERS INW Name (6) ARmumEvent PreaI LONG-TERM/GENERAL taxmount KENYLONG REINSURANCE etsa ess CIm m ) Iper Risk(5) s (5) l ( Addr er nsuran KI- e ro rpercentage or of (4) b (4) Number Lines Name e Ninth Schedule to the Insurance Regulations at , both the percentages and amounts of net retention and maximum treaty limit need to be mentioned.

nI ofany one (3) of Even ett C eaty (3) ne ype r eturnP T notes in th res T rany one Risk(2) Principal Ofcer ype of eaty er: Yed Tr (2) : Read the er: YT(1)ith reference to net retention under columns (2) and (3), attach a separate statement of maximum expected loss in respect of each treatyferent layers of cover under a non-proportional treaty need to be mentioned separatelyif it is for a specied period (for long-term insurance business).respect of non-proportional treaties.In case the estimated reinsurance premium for the current year is expected to be more than 25 percent higher or lower than the preceding yearestimated in amount in a separate note stating the reasons for the increase or decrease.Sub-Class Cover W ote Sub-class of Busi-ness2.

3.

For a quota share treaty 4.

Dif 5.

Under column (7), period for which a treaty is applicable should be stated only if the treaty is for not for twelve months (for General insurance business) or 6.

Under column (8) and (9), the commission and prot commission rates are required in respect of proportional treaties and minimum and maximum rates in 7.

Under columns (12) to (17), give the amounts of reinsurance premiums paid and claims recoveries made under the treaty for the preceding three years.

No.

INS.

59-7n ORM (1) F (*Name of Insur Class Date: No.

INS.

59-6 of : 1.

Read the notes in the Ninth Schedule to the Insurance Regulations ORMClass Busi-nessote FName of InsurDate:n CAP230.

487 Insurance [Rev.

2012 [Subsidiary] 19 , einsurance r (8) st December why 31 Reasons arrangement was not made All amounts in Kenya Shillingsear ending (7) otal claims paid during T the year the COVERED emium during (6) ) otal pr BUSINESS)* T written year A.

ARRANGEMENT nd comply INSURANCE BUSINESS* (5) Principal Ofcer ea/country in which risk is located REINSURANCE Ar Delete whichever in not applicable n BUSINESS/OUTSIDE KENY (* I ANY TERM/GENERAL A (4) BY oss ne Event lo LONG TICULARS OF INSURANCE BUSINESS NOT (KENY ble any I of AR oss PtPCeP mum es Ir ax m Risk (3) (2) Sub-Class of Business er: Y No.

INS.

59-8 (1) : 1.

Read the notes in the Ninth Schedule to the Insurance Regulations a ORM Class of Business ote F Name of Insur Date: n2.

If the information given herein does not pertain to an entire class or sub-class of business, please describe the precise business involved.

3.

Reinsurance arrangement means reinsurance treaty or facultative placement other than mandatory cessions.

Rev.

2012] Insurance CAP.

487 231 [Subsidiary] FORM No.

INS.

59-9A STATEMENT OF REINSURANCE PREMIUM LONG-TERM INSURANCE BUSINESS (Kenya busIness/outsIde Kenya busIness) (*Delete whichever is not applicable) All amounts in Kenya Shillings Name of Insurer: Year ending 31st December, 19 Class of Business Bond Industrial Ordinary Superan- Total Investment Life Life nuation Serial Number 01 02 04 03 Inward Reinsurance Premium Treaty.

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1 Facultative.

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2 Total (1+2).

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3 Reinsurance Premium Ceded to Local Insurers by way of 4 Treaty.

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5 Facultative.

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6 Total (4+5).

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Overseas Insurers by way of Treaty.

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7 Facultative.

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89 Total (7+8).

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Total Reinsurance Premium Ceded (6+9) 10 Mandatory Cessions 11 Under Section 145 (1).

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Under Section 145 (2).

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12 13 Total (111+2).

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Cessions to Africa Re.

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14 Total Reinsurance Premium Inward 15 for KRC (3+13).

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} for Others (3).

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Outward for KRC (10+14).

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} 16 for Others (10+13+14).

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.

Date: Auditor: Principal Ofcer note: Read the notes in the Ninth Schedule to the Insurance Regulations and comply.

CAP232.

487 Insurance [Rev.

2012 [Subsidiary] 19 , al 14 ot t st December other 31 Any 123 All amounts in Kenya Shillingsear ending 13 Livestock 122 ellaneous CsI op m Cr 121 Bond 120 e al C IC 12 ed nsuran mIs on I en t ork 0m 11 K ensa 11 or PW sation w om Compen- C INSURANCE BUSINESS Principal Ofcer ) glary 102 BUSINESS*) Bur all risks others A Applicable heft 10 Auditor: t 101 Fidelity Guarantee ransit 100 Cash in T Delete whichever is not dent.

BUSINESS/OUTSIDE KENY(* Health 091 A CCI OF REINSURANCE PREMIUM GENERAL a 09 (KENY ersonal Personal Accident 080 TEMENT P and sickness A - cial or al ot ommer I 08 080 mCC Motor ST Commer 123456789 10 11 12 13 14 15 16 er: Y ness I us.

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b Name of Insur of lass C Sub-Class of Business the notes in the Ninth Schedule to the Insurance Regulations and comply.

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Africa Re.

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No.

INS.

599B (4+5) 1-12).

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: Read reaty reaty.

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AL reaty.

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andatory Cessions: ORM otal (1+2).

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T OT T otal (7+8).

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.otal Reinsurance Premium otal (1 otal Reinsurance Premium: ote F Inward Reinsurance Premium:T Facultative.

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TReinsurance Premium ceded to Local Insurance by way of: Facultative.

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TOverseas Insurer by way of : Facultative.

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TT Ceded (6+9).

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.M Under sec.

145(1).

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.Under sec.

145(2)T Cessions to T Inward For others (3).

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.OutwardFor KRC (10+14) .For others (10+13+14).

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.Date: n Rev.

2012] Insurance CAP.

487 233 [Subsidiary] 19 or te , a ot IV 07 070 mr Motor Private P st December 062 31 Marine Hull tI rans 06 Other 061 t ransit All amounts in Kenya Shillingsear ending T and ne I go 060 ar Marine m Car Others 052 of.

ty 051 I 05 Pr lI ab Industrial Il INSURANCE BUSINESS ) oducts Liability 050 BUSINESS*) Pr A Applicable al Auditor Principal Ofcer Ie re I 04 040 f Fir SIDE KENY ndustr I Industrial re IC eI 03 030 Delete whichever is not f omest Fir.

d BUSINESS/OUT (* Domestic A (KENY 021 OF REINSURANCE PREMIUM GENERAL ng I 02 Others neer I ng 020 e TEMENT Car A ST on Ita 01 010 VI viation aA16123456789011 12 13 14 15 1 ness.

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.

I us b ay of: fWo er: Y lass Africa Re.

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.

d note in the Ninth Schedule to the Insurance Regulations and comply C Sub-Class of Business 1+12).

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No.

INS.

59-9B reasury.

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: Rea otal (1+2).

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reaty.

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reaty.

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otal (1 ORM T otal (4+5).

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T otal (7+8).

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.

otal Reinsurance Premium T otal Reinsurance Premium ote TF Name of Insur Inward Reinsurance Premium: T Facultative.

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T Reinsurance Premium Code to Local Insurers by Facultative.

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.

Overseas Insurers by way of: Facultative.

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.

TT Ceded (6+9) Mandatory cessions: Under sec.

145(1).

Under sec.

145(2).

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Cessions to T Inward: For KRC.

(3+3).

Outward For KRC.(10+14).

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.For others (10+13+14) Date: n CAP234.

487 Insurance [Rev.

2012 FORM No.

INS.

5910A [Subsidiary] STATEMENT OF COMMISSION LONG-TERM INSURANCE BUSINESS (KENYA BUSINESS/OUTSIDE KENYA BUSINESS*) (*Delete whichever is not applicable) All amounts in Kenya Shillings Name of Insurer: Year ending 31st December, 19 Bond Industrial Ordinary Superan- Total Class of Business Investment Life Life nuation Serial Number 01 02 03 04 Commission in Respect of Direct Business 1 Inward Reinsurance Business Treaty.

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2 Facultative.

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34 Total (2+3).

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Mandatory Cessions Under Section 145 (1).

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5 Under Section 145 (2).

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6 Total (5+6).

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7 Outward Reinsurance Business Localtreaty.

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8 Facultative.

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9 10 Total (8+9).

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11 Overseastreaty.

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12 Facultative.

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13 Total (11+12).

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14 Total (10+13).

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Net Business KRC (1+4+7-14).

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15 Others (1+4-7-14).

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.

Date: Auditor: Principal Ofcer NOTE: Read the notes in the Ninth Schedule to the Insurance Regulations and comply.

Rev.

2012] Insurance CAP.

487 235 e [Subsidiary] al C IC 08 ed nsuran mI or te a ot IV 07 079 mr Motor Private 19 P , Marine Hull 061 st December t 31 I rans 06 ransit 060 All amounts in Kenya Shillings t Other T and ear ending ne go I 053 ar Marine Car m Others 052 of.

ty I 05 Pr 051 lI ab I )* l Industrial BUSINESS*) INSURANCE BUSINESS A oducts Liability 050 Pr al Ie re I 04 040 f Fir ndustr Industrial I Auditor: re IC eI 03 030 BUSINESS/OUTSIDE KENY Delete whichever is not applicable f omest Fir A (* d Domestic OF COMMISSION GENERAL.

(KENY - TEMENT 021 neer Others AI 02 ST ng e Car 020 ng I on Ita 01 viation 010 VI Aa1123456789 10 1 12 12 14 15 } ness I us b of er: Ylass reaty.

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CSub-Class of Business reaty.

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d note in the Ninth Schedule to the Insurance Regulations and comply No.

INS.

59-10B d Reinsurance Business: 1+12).

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: Rea ORM nward Reinsurance Business:reaty.

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otal (2+3).

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otal (5+6).

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otal (8+9).

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.OverseasT otal (1 otal (10+13).

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.Net Business: KRC (1+4+7+14) Others (1+4-7-14) ote F Name of Insur Commission in Respect of: Direct Business.

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IT Facultative.

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.T Mandatory Cessions: Under sec.

145 (1).

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Under sec.

145 (2).

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T Outwar LocalT LocalFacultative.

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T OverseasFacultative.

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TT Date: n CAP236.

487 Insurance [Rev.

2012 [Subsidiary] al 13 ot t Any other 123 Live- stock 122 ellaneous 12 CsI op 121 m Cr 19 , Bond 120 - sKs en on PI0 or om t 11 st December w men sa orkmen sation 31 C 11 W Compen- All amounts in Kenya Shillings.ear ending glary all risks 102 Bur and others 10 heft 101 BUSINESS*) t Fidelity Guarantee INSURANCE BUSINESSA Auditor: Principal Ofcer Cash in ransit 100 T BUSINESS/OUTSIDE KENY.

OF COMMISSION GENERALA dent 09 Health 091 ersonal CCI (KENY Pa TEMENT and 080 A Personal Accident sickness ST al - or CI 08 ot Motor cial 080 m ommer Commer C123456789 10 11 12 13 14 15 .) } Contd ness I us b of er: Ylass reaty.

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C Sub-Class of Business reaty.

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d the notes in the Ninth Schedule to the Insurance Regulations and comply No.

INS.

5910B( d Reinsurance Business:T1+12).

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: Rea reaty.

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OverseasT ORM nward Reinsurance Business: otal (2+3).

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otal (5+6).

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otal (8+9).

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otal (1 otal (10+12).

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.Net Business: KRC (1+4+7+14) Others (1+4+7+14) ote F Name of Insur Commission in Respect of:Direct Business.

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IT Facultative.

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.T Mandatory Cessions: Under sec.

145 (1).

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Under sec.

145 (2).

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T Outwar Local Local Facultative.

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T OverseasFacultative.

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.

.

TT Date: n Rev.

2012] Insurance CAP.

487 237 [Subsidiary] 19 , early enewal emium (9) Yr pr taeC st December or f 31 n ear Iy ed (Inclu- ness (8) I the us of b ear ending e nd Ce Annuities per annum the Sums Insur sive of accrued bonuses) nsuran I fe All amounts in thousands of Kenya Shillings Il (7) Lives al ot t UMBER OF (6) ) N Policies BUSINESS*) hA IC (5) h early enewal emium wYr pr Income.

of ear INSURANCES*) tyCeP the emium (4) es Single rn pr InIdIa ness P ed I een us b Sums (3) b OF LONG-TERM INSURANCE BUSINESS Annuities Delete whichever is not applicable e Insur per annum C has BUSINESS/OUTSIDE KENY (* (INDIVIDUAL/GROUP A um I (2) nsuran rem Lives TEMENT IA (KENY fe PI ST l UMBER OF ew (1) nN Policies Principal Ofcer 1 ness I us b er: Y.

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of Others.

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AL OT No.

INS.

59-1 lass T : 1.

Read the notes in the Ninth Schedule to the Insurance Regulation and comply ORM OTE F Name of Insur C Bond Investment.

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.Industrial Life.

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.Ordinary Life.

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.SuperannuationPermanent.

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Health.

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Date: N2.

Separate statements to be submitted in respect of individual business and group insurances.

3.

Columns (2) and (7) in respect of number of lives are relevant only for group policies.

4.

Single premiums under column (4) should include consideration for immediate or deferred annuities and all other premiums paid during the year where no subsequent premium is payable.

5.

Premiums in column (4), (5) and (9) should represent gross direct premiums before deduction/addition of reinsurance premium.

CAP238.

487 Insurance [Rev.

2012 [Subsidiary].

19 - , Rever ionary TION* Bonus st December 31 ness ed I us Sum bP Insur ear ending rou A, B and C.

g LIFE/SUPERANNUA Lives Y All amounts in thousands of Kenya Shillings UMBER OF N Policies LIFE/ORDINAR ) - BUSINESS*) Rever A ness sionary Bonus I us b ed.

dual Sum Insur IVI nd I Number of ( ) ( ) Delete whichever is not applicable Policies BUSINESS/OUTSIDE KENY (* A.

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(KENY ).

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b - a Principal Ofcer.

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(1+ ear yfo nd e ear and increased ear y he y (2+3+4+5).

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t OF CHANGES IN BUSINESS BOND INVESTMENT/INDUSTRIAL Y he he (6 to 13).

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tatt changed rease ng ng I er: Yng CIIn rease st I ur CIe ur dxd al de ot No.

INS.

59-12 SUMMAR al al : 1.

Read the notes in the Ninth Schedule to the Insurance Regulations and comply t ot ot rease.

rease tCaCt ORM ne1.

By being not taken up.

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.1.

By change and decrease.

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OTES F Name of Insur 1.

Business at the beginning of the year.

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.I2.

New business written.

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3.

Old policies revived.

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4.

Old policies 5.

Bonus additions allotted.

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d6.

By death.

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7.

By Maturity.

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8.

By expiry term under temporary insurances.

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9.

By surrender of policy.

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10.

By forfeiture or lapse.

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112.

By surrender of bonus.

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.1B.

C.Date: N2.

Separate statements shall be submitted in respect of each class of business and in each case separate statements be prepared for the Kenya business and outside Kenya business.

3.

Numbers of policies and lives given in brackets( ) against items (4), (5), (12) and (13) should not be included in the totals at 4.

Only the amounts of increase or decrease in sums insured or bonus should be shown under the respective columns against items (4) and (13) respectively TENTH SCHEDULE (s.

70 and r.

21) Part a lImItatIon of exPenses of management long-term InsuranCe busIness other than IndustrIal lIfe assuranCe busIness 1.

In the case of long-term insurance business other than industrial life assurance business, the limits of management expenses including commissions to intermediaries are as follows: Rev.

2012] Insurance CAP.

487 239.

[Subsidiary] 9- The aggregate sum of , Reverionary Bonus (i) ve per centum of all premiums received during the year on policies granting an TION*st December immediate annuity or a deferred annuity in consideration of a single premium, and 1nessed ve per centum of all premiums received on other single premium policies during I the year; usSum bP Insur (ii) ten per centum of all rst years premiums and four per centum of all renewal premi- ear ending rouA, B and C.

ums received during the year on policies granting deferred annuity in consideration g of more than one premium; LIFE/SUPERANNUALives YAll amounts in thousands of Kenya Shillings (iii) fteen per centum of all premiums received during the year on policies under group UMBER OF life and superannuation schemes; N (iv) one tenth of one per centum of the average of the total sums assured by policies Policies on which no further premiums are payable (less reinsurances) at the beginning and LIFE/ORDINAR) end of the year; - BUSINESS*) (v) ve per centum of all annuities paid during the year; AnessReversionary Bonus I (vi) an amount computed on the basis of the percentages for the time being appropriate us b to the duration of the insurers life insurance business specied in the following ed.

table, namely: dualSum Insur IVI PerCentage of PremIums less reInsur- nd anCes reCeIVed durIng the year other I than PremIums referred to In Items Number of Policies( )( ) Duration of Business (I), (II) and (III) aboVe Delete whichever is not applicable of First Years of Renewal BUSINESS/OUTSIDE KENY(* Premiums Premiums A First Four Years.

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100 30 Fifth to Seventh Years.

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97 27 Eighth to Tenth Years.

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(KENY.

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95 25 ).

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After the Tenth Year if the Insurers Business in Force.

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b (a) Is less than two hundred million shillings.

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90 25 - a Principal Ofcer (b) Is less than ve hundred million shillings but not less.

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.(1+ than two hundred million shillings.

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90 24 (c) Is less than one thousand million shillings but not less ear 90 23 y than ve hundred million shillings.

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f (d) Is not less than one thousand million Shillings.

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90 22 o nd e earand increased ear yhe y(2+3+4+5).

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t OF CHANGES IN BUSINESS BOND INVESTMENT/INDUSTRIAL Explanation IIn this rule, business in force means, in relation to any expense incurred, Yhehe (6 to 13).

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tatt the total sum assured, with bonuses, without taking into account reinsurances ceded or accepted, changed reaseng ngI er: YngCI by an insurer in respect of the whole of his life insurance business on the last working day of the Inreasest IurCI e urdx year preceding the calendar year in which the expense is incurred.

dal de ot No.

INS.

59-12SUMMARalal: 1.

Read the notes in the Ninth Schedule to the Insurance Regulations and comply totot rease.

reaset Explanation IIThe duration of an insurers life insurance business shall be reckoned (a) from CaCt ORMne1.

By being not taken up.

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By change and decrease.

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.OTES the beginning of the calendar year of commencement of the business if the date of commencement FName of Insur 1.

Business at the beginning of the year.

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New business written.

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3.

Old policies revived.

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4.

Old policies 5.

Bonus additions allotted.

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d6.

By death.

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By Maturity.

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8.

By expiry term under temporary insurances.

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9.

By surrender of policy.

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10.

By forfeiture or lapse.

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112.

By surrender of bonus.

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.1B.

C.Date: N2.

Separate statements shall be submitted in respect of each class of business and in each case separate statements be prepared for the Kenya business and outside Kenya business.

3.

Numbers of policies and lives given in brackets( ) against items (4), (5), (12) and (13) should not be included in the totals at 4.

Only the amounts of increase or decrease in sums insured or bonus should be shown under the respective columns against items (4) and (13) respectively is in the rst half of the year and (b) from the end of the calendar year of such commencement if TENTH SCHEDULE(s.

70 and r.

21) Part a lImItatIon of exPenses of management long-term InsuranCe busIness other than IndustrIal lIfe assuranCe busIness.

In the case of long-term insurance business other than industrial life assurance business, the limits of management expenses including commissions to intermediaries are as follows: CAP240.

487 Insurance [Rev.

2012 [Subsidiary]the date of commencement is in the second half of the year.

2.

Industrial Life Assurance Business.In the case of industrial life assurance business, the limits of management expenses including commission to intermediaries are as follows: (a) Where the insurer has transacted business in Kenya for not more than ve years, the sum of fty ve per centum of premiums received during the year; (b) Where the insurer has transacted business in Kenya for more than ve years, the sum of forty ve per centum of premiums received during the year: Provided that where the total premium income does not exceed ten million shillings, the amounts indicated at paragraphs (a) and (b) shall be increased by ten per centum.

3.

General Insurance BusinessIn the case of general insurance business, the limits of management expenses including commissions or other remuneration for the procurement of business are as follows: (a) the amount of commission or other remuneration paid to insurance agents and brokers in respect of that business transacted in the year but not exceeding the limit prescribed in the Eleventh Schedule under regulation 22; plus (b) an amount computed according to the following table: PerCentage of PremIums aPPlICable to Insurer wrItIng general InsuranCe Part of the Total Gross Premium Income of the busIness for Insurer written direct More than 55 Years or Less with years gross Premium Sh.

25m Less than or more Sh.

25m.

First 5 Million Shillings.

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25% 25% 35% Next 7.5 Million Shillings.

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22% 22% 32% Next 7.5 Million Shillings.

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20% 20% 30% Next 10 Million Shillings.

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17% 17% 27% The Balance.

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15% 15% 25% 4.

In the case of Kenya Reinsurance Corporation or any other insurer doing only reinsurance business the limits of management expenses, excluding commission, shall be an amount not exceeding ten per centum of the total net premium income.

FORM No.

INS.

701 maxImum PermItted exPendIture: longterm InsuranCe other than IndustrIal lIfe InsuranCe All amounts in Kenya Shillings Name of Insurer: Year Ending 31st December, 19 busIness In Kenya total busIness Rev.

2012] Insurance CAP.

487 241 [Subsidiary] Premiums Permitted Premiums Permitted or Sums Amount or Sums Amount Assured Assured (1) (2) (3) (4) 1.

Five per centum: of all premiums received during the year on policies granting an immediate annuity or a deferred annuity in consideration of a single premium.

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2.

Five per centum: of all premiums received on single premium policies other than those referred to in (1) above.

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3.

Ten per centum: of all rst years premium received during the nancial year on policies granting deferred annuity in consideration of more than one premium.

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4.

Four per centum: of all renewal premium received during the nancial year on policies granting deferred annuity in consideration of more than one premium.

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5.

Fifteen per centum: of all premiums received during the year on policies under Group Life and Superannuation Schemes 6.

One-tenth of one per centum: of the average of the total sums assured by policies on which no further premiums are payable (less reinsurance) at the beginning and end of the year.

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7.

Five per centum: of all annuities paid during the year.

8.

(i) In the case of an insurer who has transacted long-term insurance business for than ve years.

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(a) 100% of rst years premiums received during the year.

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(b) 30% of renewal premiums received during the year.

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FORM No.

INS.

701(Contd.) maxImum PermItted exPendIture: longterm InsuranCe other than IndustrIal lIfe InsuranCe All amounts in Kenya Shillings Name of Insurer: Year Ending 31st December, 19 CAP242.

487 Insurance [Rev.

2012 [Subsidiary] busIness In Kenya total busIness Premiums Permitted Premiums Permitted or Sums Amount or Sums Amount Assured Assured (1) (2) (3) (4) (ii) In the case of an insurer who has transacted long-term insurance business for more than ve years but less than eight years.

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(a) 97% of rst years premiums received during the year.

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(b) 27% of renewal premiums received during the year.

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(iii) In the case of insurer who has transacted long-term insurance business for more than eight years but less than ten years.

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(a) 95% of rst years premium received during the year.

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(b) 25% of renewal premium received during the year.

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(iv) In the case of an insurer who has transacted long-term insurance business for ten years or more if the insurers business in force.

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(a) Is less than two hundred million shillings.

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90% of rst years premium received during the year.

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25% of renewal premium received during the year.

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(b) Is less than ve hundred million shillings but not less than two hundred million shillings.

90% of rst years premium received during the year.

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24% of the renewal premium received during the year.

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FORM No.

INS.

701(Contd.) maxImum PermItted exPendIture: longterm InsuranCe other than Rev.

2012] Insurance CAP.

487 243 IndustrIal lIfe InsuranCe [Subsidiary] All amounts in Kenya Shillings Name of Insurer: Year Ending 31st December, 19 busIness In Kenya total busIness Premiums Permitted Premiums Permitted or Sums Amount or Sums Amount Assured Assured (1) (2) (3) (4) (c) is less than one thousand million shillings but not less than ve hundred million shillings.

90% of rst years premiums received during the year.

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23% of the renewal premiums received during the year (d) is not less than one thousand million shillings.

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90% of rst years premiums received during the year.

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22 % of renewal premiums received during the year.

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Note.Premiums referred to in para (b) are other than the premium referred to in paragraphs (1), (2), (3), (4) and (5).

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TOTAL (1)+(2)+(3)+(4)+(5)+(6)+ (7) +(8).

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Date: Auditor: Principal Ofcer note: 1.

In columns (1) and (3), indicate the amounts of premiums or sums assured referred to in the description.

2.

The amounts in columns (2) and (4) shall be arrived at by applying the respective percentages to the amounts in column (1) and (3) respectively.

FORM No.

INS.

702 maxImum PermItted exPendIture: IndustrIal lIfe InsuranCe busIness All amounts in Kenya Shillings Name of Insurer: Year Ending 31st December, 19 busIness In Kenya total busIness CAP244.

487 Insurance [Rev.

2012 [Subsidiary] Premiums Permitted Premiums Permitted or Sums Amount or Sums Amount Assured Assured (1) (2) (3) (4) Where the insurer has transacted industrial life insurance business.

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(a) for ve years or less; 55 %* of premiums received during the year.

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(a) for more than ve years 45 % of premiums received during the year.

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Date: Auditor Principal Ofcer *In case the premium income does not exceed Sh.

10 million, the above percentages shall be increased to (a) 65% and (b) 55% respectively.

FORM No.

INS.

703 maxImum PermItted exPendIture: general InsuranCe busIness All amounts in Kenya Shillings Name of Insurer: Year Ended 31st December, 19 Kenya busIness total busIness 13 Rev.

2012] Insurance CAP.

487 245 [Subsidiary] Premiums Permitted Premiums Permitted Amount Amount (1) (2) (3) (4) 1.

Gross premium income written direct.

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2.

Actual amount of commission or other remuneration paid to insurance agents and brokers on procuration of business in the year but not exceeding the limits prescribed in Regulation 21.

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3.

25% of rst 5 million shillings of gross direct premium income.

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4.

22 % of next 7.5 million shillings of gross direct premium income.

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5.

20% of next 7.5 million shillings of gross direct premium income.

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6.

17 % of next 10 million shillings of gross direct premium income.

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7.

15% of the balance of gross premium income 8.

Sub-Total (3)+(4)+(5)+(6)+(7).

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9.

In the case of an insurer who has transacted general insurance business in Kenya for less than 6 years and whose total gross premium income written direct in Kenya in the year is less than 25 million shillings 10% of such gross direct premium 10.

TOTAL (12)+(8)+(9).

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Date: Auditor: Principal Ofcer note: 1.

In columns (1) and (3) mention the amounts of premiums referred to in the description.

2.

The amounts in the column (2) and (4) in respect of item 2 shall be the totals in columns (7) and (10) in Form No.

INS.

70-3A.

3.The amounts in columns (2) and (4) in respect of items 3 to 7 shall be arrived at by applying the respective percentages to the amounts in columns (1) and (3) respectively.

CAP246.

487 Insurance [Rev.

2012 [Subsidiary] , 19 (7)+(9) (10) ness I (9) us Actual Outgo b Commission a Amounts in Kenya Shillings eny ect ear ending 31st December K de All I ritten emium (8) uts oss Dir W BUSINESS o Gr Pr Amount which is Lower of (5) & (6) (7) Actual (6) Commission Outgo ness Principal Ofcer I us ness bI (5).

us a Amount COMMISSION OUTGO ON DIRECT b eny eKC Maximum Permitted Commission % (4) ACTUAL nsuran 10 20 20 25 20 10 17 17 10 10 20 10 20 10 Auditor: I AND ect eneral (3) g ritten emium oss Dir W Gr Pr Y OF MAXIMUM PERMITTED (2).

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TEMENT A AL ST OT go.

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.go and Others.

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s Compensation.

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T.

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-Private.

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-Commercial.

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.Accident.

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er: viation.

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orkmen Class of Business A Engineering.

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.Fire-Domestic.

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.Fire-Industrial.

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LiabilityMarine-Hull.

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.Marine-CarMarine-CarMotorMotorPersonal Theft.

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.WMedical Insurance.

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.Miscellaneous.

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No.

INS.

703A (1) : Commission shall include brokerage fee or other remuneration paid to an intermediary ORM Serial OTE F Name of Insur Number 01 02 03 04 05 06 07 08 09 10 11 12 Date: N Rev.

2012] Insurance CAP.

487 247 [Subsidiary] FORM No.

INS.

704 maxImum PermItted exPendIture: reInsuranCe ComPany All amounts in Kenya Shillings Name of Insurer: Year ending 31st December, 19 Long-term General Total Insurance Insurance (1+2) Business Business (1) (2) (3) Total Net Premium.

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1 Ten Percent of (1).

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2 Date: Auditor: Principal Ofcer CAP248.

487 Insurance [Rev.

2012 [Subsidiary] L.N.

108/2002.

ELEVENTH SCHEDULE (s.

73 (2) and r.

22) maxImum broKerage, CommIssIon or other IntermedIary ProCuratIon fees Payable A.

Long-term Insurance Business In the case of long-term insurance business, where a rate of premium is approved by an actuary in respect of any class of policy, the insurer shall not, except with the approval of an actuary, pay or allow in respect of any policy of that class a commission or rebate at a rate greater than the maximum rate of commission or rebate to which the rst mentioned actuary had regard when approving the rate of premium, but in any case the rates of commission shall not exceed the limits given below.

1.

Bond Investment Business Annual premium policies.

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4% of rst years premium.

2% of renewal premium.

Single premium policies.

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2% of premium.

2.

Industrial Life Business Weekly premium.

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30% rst year.

Weekly premium.

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25% renewals.

Monthly premium.

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15% rst year.

Monthly premium.

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10% renewals.

Other premium.

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10% rst year.

Other premium.

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7% renewals.

3.

ordInary lIfe busIness (IndIVIdual lIfe PolICIes) Term and Temporary Assurances.

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10% of premium up to maximum of 10 years.

All other assurance covers.

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50% of rst years premium.

20% of second years premium.

5% of 3rd to 10th years renewal premium.

Single premium policies.

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2% of the premium.

4.

suPerannuatIon busIness (InCludIng grouP lIfe PolICIes) Endowment Assurances.

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50% of rst years premium.

Whole Life Assurances.

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2% of renewal premium.

Deferred Annuity and pure endowment.

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4% of rst years premium.

2% of renewal premium.

Immediate Annuities.

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2% of consideration.

Rev.

2012] Insurance CAP.

487 249 Term Assurances.

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8% of [Subsidiary] premium.

Single premium policies and annuities.

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2% of premium.

Deposit Administration.

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1% procuration commission on amounts deposited in the rst year by a new client.

b.

general InsuranCe busIness Serial Number Class of Business Percentage of premium 10% 01 Aviation.

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20% 02 Engineering Insurance.

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20% 03 Fire-Domestic.

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25% 04 Fire-Industrial.

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20% 05 Liability.

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06 Marine-Cargo and other transit.

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17.5% Marine Hull.

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10% 10% 07 Motor-Private.

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10% 08 Motor-Commercial.

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20% 09 Personal Accident.

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20% 10 Theft.

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20% 11 Workmens Compensation.

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20% 12 Medical Insurance.

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10% 13 Miscellaneous.

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TWELFTH SCHEDULE (s.

88 (1) and r.

24) rules for asCertaInIng the amount of a PaId-uP PolICy 1.

In respect of any policy (other than a policy for the whole term of life where the premiums are payable throughout life), on which the maximum number of annual premiums payable is xed and premiums are of uniform amount, the paid-up sum assured, exclusive of bonus additions, shall be the sum CAP250.

487 Insurance [Rev.

2012 [Subsidiary] which bears to the original sum insured the same proportion as the number of complete months premiums which have been paid on the policy bears to the number of months premium originally payable.

2.

In respect of any policy for the whole term of life (where the premiums are payable throughout life), the paid-up sum assured, exclusive of bonus additions, shall be a sum bearing the same proportion to the value of the policy as the sum of one shilling bears to the present value (at the attained age of the person whose life is insured) of the reversion in the sum of one shilling according to the contingency upon which the sum insured under the original policy was payable.

3.

If it is the practice of an insurer to permit paid up policies to participate in prots and if the insurers actuary is of the opinion that the paid-up value arrived at by the application of rule 1 or 2 of this Schedule should be reduced suitably, it may be so done with the approval of the Commissioner of Insurance.

4.

(1) For the purpose of rule 2, the value of the policy shall be the difference between the present values (at the attained age of the person whose life is insured) of (a) the reversion in the sum insured according to the contingency upon which it is payable; and (b) the future net premiums.

(2) Net premium as used in subrule (1) (b) means such premium, exclusive of any addition for bonuses, ofce expenses and other charges, as is sufcient (according to the rate of interest and rates of mortality assumed and on the assumption that the age of the person whose life is insured is the age at his birthday next following the date one year after the date of the issue of the policy) to provide for the risk incurred by the insurer in issuing the policy.

5.

(1) For the purpose of this scheme, the calculations shall be made as at the day immediately preceding that on which the rst premium which has not been paid falls, or fell due.

(2) For the purposes of this rule, any premium which has not been paid in cash and which is deemed to be a debt owing to the insurer shall be deemed to have been paid.

6.

For the purposes of rules 2 and 4 (a) interest shall be assumed at the rate of 3 per centum per annum; (b) the rates of mortality shall be assumed, in the case of an ordinary life policy, according to the ultimate table of mortality included in the tables published for the Institute of Actuaries in England and Faculty of Actuaries in Scotland under the title A 1949-52 Tables for Assured Lives and, in the case of a policy of industrial life Rev.

2012] Insurance CAP.

487 251 assurance, according to the ultimate table of mortality included [Subsidiary] in the tables published for the Institute of Actuaries in England and the Faculty of Actuaries in Scotland under the short title A 1924-29 Table.

7.

There shall be added to the amount (exclusive of bonus additions) of any paid-up policy calculated in accordance with rule 1 or rule 2, the amount of all reversionary bonuses declared upon (and still attaching to) the original policy.

THIRTEENTH SCHEDULE (s.

89 (3) and r.

25) rules for asCertaInIng the surrender Value of a PolICy 1.

The surrender value of a policy at any date shall be the present value (according to the contingency upon which the policy is payable) of the amount of the paid-up policy which would be granted as at that date, determined according to the rules prescribed in the Twelfth Schedule or the amount payable at death if death were to occur at the date as at which the surrender value is calculated, whichever is the less.

2.

For the purposes of determining the present value of the amount of paid-up policy under rule 1 (a) interest shall be assumed at the rate of 6 per centum per annum for contracts registered in terms of the Income Tax Act and 5 per centum per annum for all other contracts; (b) the rate of mortality shall be assumed, in the case of an ordinary life policy, according to the ultimate table of mortality included in the tables published for the Institute of Actuaries in England and Faculty of Actuaries in Scotland under the title A 1949-52 Tables for Assured Lives and, in the case of a policy of industrial assurance, according to the ultimate table of mortality included in the tables published for the Institute of Actuaries in England and Faculty of Actuaries in Scotland under the short title A 1924-29 Table; and (c) in the case of a policy issued for a term other than the whole term of life, the remaining term at the date as at which the surrender value of the policy is calculated shall be obtained by deducting from the original term of the policy the duration of the policy in completed years and months at that date.

FOURTEENTH SCHEDULE form no.

Ins.

111 (s.

111 (1) and r.

29) form of aPPoIntment where nomInee Is mInor CAP252.

487 Insurance [Rev.

2012 [Subsidiary] I,.

son/daughter (Name in full) of.

of (Name of father) .the holder of (Address of person making appointment) ordinary life assurance policy No.

.

appoint.

of.

(Name of appointee) (Address of appointee) son/daughter of.

as the person to receive the money secured thereby in the event of my death during the minority of my nominee.

(Name of nominee) of .son/daughter of.

(Address of nominee) Signed at.

this.

day of.

, 19 Witness.

(Signature) (Signature of holder of Policy) Name Address.

I,.

the above named (Name in full) appointee hereby signify my consent to be appointed as aforesaid and to hold the moneys payable under the aforesaid Policy No.

.

for the benet of.

(Name of minor nominee) Witness.

.

(Signature of appointee).

(Name) Date.

(Address) FIFTEENTH SCHEDULE (rr.

32 and 33) Rev.

2012] Insurance CAP.

487 253 [Subsidiary] mandatory reInsuranCe CessIons Part ageneral InsuranCe busIness 1.

For the purposes of section 145 (1) of the Act, every insurer shall reinsure with the Corporation 20% (twenty per cent) of each policy of general insurance issued or renewed in Kenya by the insurer: Provided that this percentage shall be reduced by 5 % (ve per cent) every year thereby ceasing to apply on the 1st January, 2000.

2.

The premium payable by an insurer to the Corporation in respect of cessions made to the Corporation shall be a pro-rata share of the premium actually received or receivable by the insurer from the insured, on the risk reinsured without any deductions whatsoever.

3.

Liability of the Corporation in respect of the prescribed percentage of each policy reinsured with the Corporation shall commence simultaneously with that of the ceding insurer.

4.

Every insurer shall, other than for motor insurance and marine insurance businesses, render to the Corporation quarterly statement of account within 60 days of the last day of March, June, September and December of each year in such form as the Corporation may require.

5.

In the case of motor insurance business, every insurer shall render to the Corporation not later than the 15th day of each month statements of account of all business written as motor insurance in the preceding month in such form as the Corporation may require.

6.

(a) In the case of marine insurance business, every insurer shall render to the Corporation on Wednesday of each week declarations of liability accepted in the preceding week of all the business written as marine cargo insurance and such declaration shall be produced by the insurers concerned in such form as the Corporation may require.

(b) In addition every insurer shall advise the Corporation immediately of any shipment or transit or known accumulation at any one location where the Corporations liability reaches a certain limit which shall be notied to the insurers by the Corporation.

The manner in which insurers will advise the Corporation shall be in such form as the Corporation may require.

7.

In the case of marine insurance business, every insurer shall render to the Corporation quarterly statements of account within 45 days of the last day of March, June, September and December of each year in such form as the Corporation may require.

8.

(a) Settlements of quarterly account in the case of insurance business other than motor insurance business shall be made at the time of rendering the accounts to the Corporation.

CAP254.

487 Insurance [Rev.

2012 [Subsidiary] (b) Where an account shows a balance in favour of an insurer, the Corporation shall settle such an account within 7 days of conrmation of the account by the Corporation which shall in either case be within one month of receipt of the accounts.

9.

The settlement of monthly accounts in respect of motor insurance business shall be made at the time of rendering an account to the Corporation and where the account shows a balance in favour of the insurer the Corporation shall settle such an account within 7 days of conrmation of the account by the Corporation which shall in either case be within one month of the receipt of the accounts.

10.

The Corporation shall pay the insurer a reinsurance commission at the following rates expressed as percentages of the premiums payable by the insurer: Serial Class of Business Reinsurance Number Commission Rate 01 Aviation-Aircrew personal accident insurance.

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22 % Aviation-others.

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15% 02 Engineering.

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25% 03 Fire-Domestic.

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30% 04 FireIndustrial.

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30% 05 Liability.

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25% 06 Marine-Cargo and other transit.

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22 % Marine-Hull.

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15% 07 Motor-Private.

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15% 08 Motor-Commercial.

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15% 09 Personal Accident.

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25% 10 Theft.

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25% 11 Workmens compensation.

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25% 12 Medical Insurance 13 Miscellaneous Bonds.

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15% Others.

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25% 11.

For the purposes of section 145 (2) of the Act, every insurer shall with effect from 1st January, 1999 reinsure with the Kenya Reinsurance Corporation eighteen (18%) per cent of each of his reinsurance treaties in respect of general business placed in the international reinsurance market: Provided that this requirement shall cease to apply on 31st December, 2015 or on the date the Kenya Reinsurance Corporation Limited is privatized, whichever is earlier.

12.

Every insurer shall submit to the Corporation copies of all its reinsurance treaties relating to its general insurance business which are in force at the commencement of these Regulations and those to be issued in future and any amendment thereto.

Rev.

2012] Insurance CAP.

487 255 Part b long-term InsuranCe busIness 1.

For the purposes of section 145 (1) of the Act, every insurer shall [Subsidiary] reinsure with the Corporation 20% (twenty per cent) of each policy of long-term insurance issued in Kenya by the insurer: Provided that this percentage shall be reduced by 5 % (ve per cent) every year thereby ceasing to apply on the 1st January, 2000.

2.

The premium payable by an insurer to the Corporation in respect of cessions made to the Corporation shall be pro-rata share of the premium actually received or received by the insurer from the insurer from the insured, on the risk reinsured without any deduction whatsoever.

3.

Liability of the Corporation in respect of the prescribed percentage of each policy reinsured with the Corporation shall commence simultaneously with that of the ceding insurer.

4.

The Corporation shall pay the insurer a reinsurance commission at the following rates expressed as percentages of the premium payable by the insurer: Serial Class of Business Reinsurance Commission Rate Number 01 bond InVestment busIness Annual Premium Policy.

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9% of rst years premium 7% of renewal premium Single Premium Policy.

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7% of premium 02 IndustrIal lIfe busIness Weekly premium.

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35% of rst years premium 30% of renewal premium Monthly premium.

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20% of rst years premium 15% of renewal premium Other premium.

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15% of rst years premium 12% of renewal premium 03 ordInary lIfe busIness Term and Temporary Assurance.

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15% of premium upto maximum 10 years Any other assurance cover.

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.55% of rst years premium 25% of second years premium 10% of third to tenth years renewal premium Single premium policy.

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7% of premium 04 suPerannuatIon busIness (InCludIng grouP lIfe PolICIes) Endowment and whole life assurance.

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55% of rst years premium CAP256.

487 Insurance [Rev.

2012 [Subsidiary] 7% of renewal premium Deferred Annuity and pure endowment assurance.

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9% of rst years premium 7% of renewal premium Immediate annuity.

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7% of consideration Term assurance including permanent health insurance.

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13% of premium Single premium policy and annuity.

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7% of premium Deposit administration.

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6% of amount deposited in rst year by a new client.

5.

For the purposes of section 145 (2) of the Act, every insurer shall reinsure with the Kenya Reinsurance Corporation every policy of long-term insurance issued in Kenya on the following basis (i) in respect of any policy already issued or issued hereafter and which is subject to reinsurance on risk premium basis, eigh- teen (18%) per cent of the excess after the ceding companys net retention on the same terms and conditions offered to the most favoured reinsurer in such reinsurance with effect from 1st January, 1999: Provided that this requirement shall cease to apply on 31st December, 2015 or on the date the Kenya Reinsurance Corporation Limited is privatized, whichever is earlier; (ii) in respect of any policy issued after the 1st April, 1979 and which is subject to reinsurance on original terms eighteen (18%) per cent of the excess after the ceding companys net retention on the same terms and conditions offered to the most favoured reinsurer in such reinsurance with effect from 1st January, 1999: Provided that this requirement shall cease to apply on the 31st December, 2015 or on the date the Kenya Reinsurance Corporation Limited is privatized, whichever is earlier.

6.

Every insurer shall render to the Corporation not later than the 15th day of each month statements of mandatory cessions in such form as the Corporation may require.

In respect of policies insuring sub-standard lives and those having sums insured in excess of a certain amount on any one life as may be indicated by the Corporation, the statements shall be required to be rendered separately in such form and within such time limit as may be required by the Corporation.

7.

The Corporation shall be informed at least 30 days before any proposed alteration in the levels of a ceding companys net retention (i.e.

liability after all reinsurances including compulsory cession) is to be put into effect.

8.

Unless the Corporation agrees to any other arrangement, every insurer shall render to the Corporation quarterly statements of account within 60 days of the last day of March, June, September and December of each year in such form as the Corporation may require.

Rev.

2012] Insurance CAP.

487 257 [Subsidiary] 9.

Settlements of the quarterly accounts shall be made at the time of rendering the accounts to the Corporation.

Where an accoun