In October 2025, the Insurance Regulatory Authority (IRA) published 13 draft regulations (Draft Regulations) that propose amending existing regulations or creating new regulatory frameworks for the insurance sector. These include:
- Insurance (Amendment) Regulations, 2025
- Insurance (Intermediaries) Regulations, 2025
- Insurance (Market Conduct) Guidelines, 2025
- Insurance (Index Insurance) Regulations, 2025
- Insurance (Corporate Governance) Guidelines, 2025
- Insurance (Claims Management) Guidelines, 2025
-
Insurance (Reinsurance Arrangements) Guidelines, 2025
Once enacted, some significant changes will be introduced.
Increased insurance licensing fees
Among the shifts that these Draft Regulations propose is a significant increase in the licensing and annual renewal fees for licensees under the Insurance Act, Cap. 487, Laws of Kenya.
Insurance companies are set to pay Ksh500 000, which is more than triple the current Ksh150 000. Reinsurers will see an even larger increase, from Ksh250 000 to Ksh750 000. Intermediaries are not spared either, with fees for brokers and medical insurance providers rising tenfold to KES 100 000, fees for bancassurance intermediaries increasing from KES 20 000 to KES 200 000, and agents moving from Ksh1 000 to Ksh5 000.
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The IRA has explained that these increases are driven by the rising cost and complexity of its supervisory functions. Although the Authority acknowledges that this will raise compliance costs for licensees, it considers the adjustment necessary for effective oversight.
Revised corporate governance requirements
The IRA has proposed the draft Insurance (Corporate Governance) Guidelines, 2025, to replace the 2011 version, which applies to all insurers and reinsurers. While being largely similar to the current guidelines, the 2025 draft proposes to amend the qualification to be an “independent director” to include having less than 5% shareholding in the licensee, its parent entity, or subsidiary, a prohibition on cross‑directorships or significant links with other directors (although this is not expressly defined).
Notably, the 2025 draft guidelines have omitted the current requirement that one-third of board members be Kenyan citizens. However, this provision remains in the Insurance Act and will continue to apply unless the Act is amended.
The draft Insurance (Corporate Governance) Guidelines, 2025, if enacted, will have a six-month transitional period after gazettement before they become enforceable.
New insurance business classes
The Draft Regulations have also revised the categorisation of business classes offered by insurers. In doing so, the IRA has proposed the introduction of cybersecurity and virtual assets insurance as sub-classes of general insurance in Kenya. The recognition of virtual assets insurance aligns with Kenya’s recent enactment of the Virtual Assets Services Providers Act, 2025, which creates a regulatory framework for dealing in virtual assets.
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The IRA has also proposed the new Insurance (Index Insurance) Regulations, 2025, which aim to establish a formal regulatory framework for the provision of index insurance in Kenya. Index insurance is a growing product class in Kenya, particularly used to cover risks in the agricultural sector. The Draft Regulations intend to establish the approval process for such products by the IRA, including their minimum features and maximum claim payout periods.
Conclusion
The IRA is currently receiving comments from industry stakeholders and the public until 21 November 2025, following which the Draft Regulations may be amended to incorporate such input. At the moment, there is no timeline for their proposed enactment.
This article was written by Christina Nduba-Banja and Kendall Evans, Partners, and Mutugi Mutegi, Senior Associate, Bowmans Kenya.
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