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MPs back Sh100,000 fine for insurance professionals with fake papers
The National Assembly Finance Committee says the higher fine in the Insurance Professionals Bill, 2024 will deter professionals from falsifying information for market approval.
A Parliamentary committee has backed the Insurance Regulatory Authority’s (IRA) push to double the proposed fine on insurance professionals who falsify information to acquire practising certificates to Sh100,000.
The National Assembly Committee on Finance and National Planning in its report on the Insurance Professionals Bill, 2024 says the higher fine will deter insurance professionals who are keen to falsify information to get approval to operate in the Kenyan market.
The Bill comes amid growing claims of professional misconduct in the local industry, notably the withholding of compensation for victims.
The report was tabled in the House last week as Members of Parliament move to pass the new law that will require all insurance professionals to register and get approval from a new entity, the Insurance Professionals Committee (IPC). The entity will be under a new body, the Insurance Institute of Kenya.
“The committee agreed with the stakeholder that raising the penalty for all offenses under the section will deter dishonesty in the registration process,” the committee says in its report set to be adopted by lawmakers.
Insurance professionals targeted under the proposed law include brokers, re-insurers, claims settlement agents and those offering insurance consultancy services among others.
“Amend Clause 24(4) by enhancing the Sh50,000 fine imposed for making false statements in an application for registration as an insurance professional. The fine may be considered low and hence an ineffective deterrent measure,” IRA said in its appeal to the committee.
Industry lobby, the Institute of Certified Public Accountants of Kenya (ICPAK) had also pushed for a Sh100,000 fine for all professionals who provide false information to get a practicing certificate.
The industry has come under storm in recent times mostly regarding delays in settling insurance compensation claims.
For example, in the year that ended in June 2023, the insurance sector contributed 60 percent of the abuse of buyer power cases that were investigated by the Competition Authority of Kenya with 68 out of 114 cases. Most of them were on delayed payments.
IRA says that despite the growth in the number of cases of advocates withholding compensation claims, insurers have been reluctant to provide data on claims settlement.
Besides registering professionals keen to enter the insurance space in Kenya, IPC will also be tasked with monitoring the sector to pick out matters that hamper the quality of service in the sector.
The Insurance Professionals Bill, 2024 will require insurance professionals, both Kenyans and non-Kenyans to get clearance and be registered with the new committee.
