The Kenyan government announced that the maximum compensation payable to policyholders of collapsed insurance companies has been doubled to KSh500,000 per claim.
In Gazette Notice No. 349, dated January 9, the Policyholders Compensation Fund Board, in consultation with the Cabinet Secretary for the National Treasury, confirmed the new compensation limit.
“pursuant to section 179 of the Insurance Act and regulation 12 of the Insurance (Policyholders Compensation Fund) Regulations, 2010, the Board of Trustees of the Policyholders Compensation Fund, in consultation with the Cabinet Secretary, National Treasury, has approved that the maximum amount payable as compensation on any one claim, for all classes of insurance, shall be Kenya Shilling Five Hundred Thousand (KSh. 500,000),” the notice reads.
Policyholders of Collapsed Insurance Funds Covered
According to the notice, the decision aims to strengthen consumer protection and provide timely financial relief to individuals and businesses affected by insurer failures.
The new limit covers all classes of insurance, ensuring a uniform safety net for policyholders across the sector.
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“This compensation limit shall apply to policyholders and claimants of any insurer that is, after the commencement date of this Notice, placed under statutory management or whose licence is cancelled in accordance with section 67C (2) of the Insurance Act,” the notice further stated, highlighting that policyholders of insolvent or deregistered insurers are fully protected.
IRA Hikes License and Annual Fees for Insurers, Reinsurers, and Intermediaries
Under the proposed insurance regulations and guidelines, the license fees and annual operating fees for insurance and reinsurance companies will increase by 3.3 times and 3 times, respectively.
The draft also proposes increasing the annual fees for intermediaries such as agents, brokers, and risk assessors by up to 10 times.
According to the IRA, the proposed regulations aim to strengthen the insurance legal framework in Kenya by addressing evolving market needs, the introduction of complex insurance products, rapid technological changes, and harmonisation with international best practices.
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IRA proposes raising insurers’ licensing fees to Ksh 500,000 from Ksh 150,000 and reinsurers’ to Ksh 750,000 from Ksh 500,000.
According to the proposed structure, the licensing fee for insurance companies will rise from Ksh 150,000 to Ksh 500,000, while reinsurance companies will see their fees jump from Ksh 250,000 to Ksh 750,000.
The annual renewal fees for these entities have also been adjusted to match the new licensing rates, meaning insurers will now pay Ksh 500,000 annually, up from Ksh 150,000, and reinsurers will pay Ksh 750,000, up from Ksh 250,000.
However, micro-insurance companies have been spared from the changes, with their fees maintained at Ksh 150,000.
Mohamed Sahal, the Managing Trustee, said, “The notice shall take effect from the date of publication and shall remain in force until otherwise notified.”
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