Kenya’s parliament passed a new law under the Insurance Act which states that “An intermediary shall not receive any premiums on behalf of an insurer.”
Policy holders will therefore, have to pay their premiums directly to the insurance providers.
The law was passed by members of parliament after reports emerged, accusing the Brokers of delayed remittance of premiums paid by policy holders.
Agents have also been accused of engaging in fraud as well.
The Insurance Regulatory Authority noted that in the last quarter of 2018, the highest cases of fraud in the industry were carried out by Insurance Agents.
There are currently an estimated number of 200 Insurance brokers and more than 10,000 Insurance Agents in Kenya.
The Brokers and Agents, each act as intermediaries between policy holders and the insurance companies.
These Brokers and Agents, advise buyers on fairly priced insurance products, offer policies from different insurance companies, assist in the creation of risk management strategies, and collect premiums on behalf of insurance providers.
As at 2016, insurance intermediaries had sold 81 percent of the Life Business and 85 percent of the General Business in Kenya.
The new law, has put the future of insurance brokers and agents, in waters of uncertainty.
As expected, the Association of Insurance Brokers of Kenya is however opposed to the move as it will lead to loss of business.
