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Seven insurers face IRA fines for reporting gaps
Mwambu Mabonga at the IRA's Upper Hill office on February 16, 2023. President Ruto has revoked his appointment as the chairman of the Insurance Regulatory Authority (IRA). PHOTO | DIANA NGILA | NMG
Seven insurance firms face fines from the regulator after missing the deadlines for submitting records of their business performance, including premiums received and claims paid out as provided in law.
The latest Insurance Regulatory Authority (IRA) disclosures show that Corporate Insurance, Monarch Insurance General, Xplico Insurance, Invesco Assurance and Trident Insurance —all of which had been fined in 2021— continued with the breaches.
The five were in addition to African Merchant Assurance Company (Amaco) and Kuscco Mutual Assurance that also failed to submit their quarterly unaudited financial statements as required by law.
The breaches were committed in different quarters of the year, with others such as Monarch Insurance Company Limited General failing to submit to the IRA the books of account within the required time for any of the quarters.
All seven insurers have been punished in the previous two years, shining a spotlight on their continued breach of insurance regulations amid rising customer complaints over claims payment.
The IRA in 2021 fined Invesco Assurance Sh24.94 million over missed deadlines while that of Xplico was Sh18.9 million. Trident Insurance was fined Sh900,000) as Corporate paid Sh200,000.
The seven insurers also featured in the top 10 list of insurers against which insurers complained to the IRA, mainly regarding delayed or rejected claims.
Insurance Act 2020 requires all insurers to prepare and submit an unaudited revenue account, balance sheet, profit and loss account and statement of total assets and total liability within 30 days of the end of every quarter and submit to the IRA.
“An insurer that fails to comply shall be liable to a penalty of Sh200,000 and a further penalty of Sh10,000 for each day after the expiry of the prescribed period during which the insurer remains non-compliant,” says the Act.
Failure to submit the quarterly statements means the IRA is in the dark about how much premiums these insurers collected, how many claims they received from customers and the value they paid out.
The IRA is also not able to tell the stability of their business in terms of the assets they have, the liabilities and the capital positions.
The Insurance Act further says any insurer that fails to pay any levy or penalty by the due date risks a fine of up to Sh500,000 and a further Sh1,000 for every day the breach continues.
Penalties related to breaches of the Insurance Act are paid into the Policyholders Compensation Fund — a corporation that compensates customers when an insurer is put under statutory management.
