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Arrangement of Sections
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PART I – PRELIMINARY
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...
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PART III – REGISTRATION OF INSURERS
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PART IV – DEPOSITS
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PART V – ASSETS, LIABILITIES, SOLVENCY MARGINS AND INVESTMENTS
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PART VI – ACCOUNTS, BALANCE SHEETS, AUDIT AND ACTUARIAL INVESTIGATIONS
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PART VII – MANAGEMENT AND EXPENSES
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PART VIII – RATES, POLICY TERMS AND CLAIMS SETTLEMENT
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PART IX – ASSIGNMENTS, MORTGAGES AND NOMINATIONS
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PART X – CLAIMS ON SMALL LIFE POLICIES
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PART XI – TRANSFERS AND AMALGAMATIONS
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PART XII – INSOLVENCY AND WINDING UP
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PART XIV – MANDATORY REINSURANCE CESSIONS
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PART XV – INTERMEDIARIES, RISK MANAGERS, MOTOR ASSESSORS, INSURANCE INVESTIGATOR, LOSS ADJUSTERS, INSURANCE SURVEYORS MEDICAL, INSURANCE PROVIDER AND CLAIMS SETTLING AGENTS
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150.Only registered brokers, agents, risk managers, motor assessors, insurance investigator, loss adjusters, surveyors, medical insurance provider and claims setting agents to carry on business
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150.Only registered brokers, agents, risk managers, motor assessors, insurance investigator, loss adjusters, surveyors, medical insurance provider and claims setting agents to carry on business
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150.Only registered brokers, agents, risk managers, motor assessors, insurance investigator, loss adjusters, surveyors, medical insurance provider and claims setting agents to carry on business
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150.Only registered brokers, agents, risk managers, motor assessors, insurance investigator, loss adjusters, surveyors, medical insurance provider and claims setting agents to carry on business
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150A.Registration of medical insurance providers
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150A.Registration of medical insurance providers
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151.Application for registration
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151.Application for registration
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152.Disqualifications
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152.Disqualifications
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152.Disqualifications
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153.Registration and re-registration
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153.Registration and re-registration
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153.Registration and re-registration
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153.Registration and re-registration
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153.Registration and re-registration
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154.Business by agents
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154.Business by agents
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154.Business by agents
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155.Returns
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156.Advance payment of premiums
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156.Advance payment of premiums
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156.Advance payment of premiums
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156.Advance payment of premiums
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156.Advance payment of premiums
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156.Advance payment of premiums
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156.Advance payment of premiums
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156.Advance payment of premiums
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PART XVII – ADVERTISEMENTS AND STATEMENTS
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PART XVIII – LEGAL PROCEEDINGS AND APPEALS
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PART XIX – MINISTER’S POWERS
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PART XX – GENERAL PROVISIONS RELATING TO REGISTRATIONS AND
CERTIFICATES
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PART XXI – SUPPLEMENTARY PROVISIONS
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SCHEDULES
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SECOND SCHEDULE [Sections 23 and
28, Act No. 12 of 1994, s. 38, L.N. 76/1999, L.N. 97/2007, r. 2, L.N.
58/2012, s. 4, L.N. 51/2013, s. 2, Act No. 14 of 2015, s. 32, Act
No. 50 of 2016, s. 11, Act No. 11 of 2017, Sch.]
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Subsidiary Legislation
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PART I – PRELIMINARY
| 1. |
Short title
This Act may be cited as the Insurance Act.
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| 2. |
Interpretation
| (1) |
In this Act, unless the context otherwise requires—
“actuary” means—
| (a) |
a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or
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| (b) |
such other person having actuarial knowledge as the Commissioner may, on the application of a member of the insurance industry, approve;
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“admitted asset” means any property, security, item or interest of a person permitted or required by or under section 42 to be regarded as an admitted asset;
“admitted liability” means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability;
“Advisory Board” means the board established by section 157;
“affairs”, in relation to a person or to a person associated with another person, includes—
| (a) |
the promotion, formation, membership, control, trading, dealings, business and property of the person;
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| (b) |
the ownership of shares in, debentures of and interests made available by the person;
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| (c) |
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to influence materially the policy of the person; and
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| (d) |
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person;
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“agent” means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;
“appointed date” means the date specified in section 1 for the coming into force of this Act;
“asset” includes any property, security, item or interest of a person;
“auditor” means a person who is qualified to be appointed an auditor of a company under section 161 of the Companies Act;
“bank” has the meaning assigned to it in the Banking Act ( Cap. 488);
“bond investment business” means the business of issuing bonds or endowment certificates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business;
“broker” means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, fee, allowance, return, or otherwise for or on behalf of an insurer, policy-holder or proposer for insurance or reinsurance; but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya;
“certified” means certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;
“Chairman” means the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;
“child’s advancement policy” means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions:
| (a) |
provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age;
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| (b) |
provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age;
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“claims settling agent” means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;
“Commissioner” means the officer appointed under section 3;
“contract of insurance” includes a contract of reinsurance;
“Corporation” means the Kenya Reinsurance Corporation established under section 129;
“court” means the High Court;
“dependent”, in relation to a company, means—
| (a) |
that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or
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| (b) |
that the first-mentioned company is a dependent of a company which is that other company’s dependent;
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“director” means a person occupying the position of a director by whatever name he may be called;
“document” includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;
“financial institution” has the meaning assigned to it in the Banking Act ( Cap. 488) and includes a mortgage finance company within the meaning of that Act;
“financial year” means the calendar year;
“general insurance business” means insurance business of any class or classes not being long term insurance business;
“gross direct premium” means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of—
| (a) |
any premium payable in respect of mandatory cessions falling under section 145 of this Act;
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| (b) |
any other reinsurance premium ceded;
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“gross liability” means liability before deducting any part of it which is re-insured;
“gross premium” means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;
“industrial life assurance business” means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work;
“insurance business” means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes—
| (a) |
the effecting and carrying out by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums;
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| (b) |
the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts;
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| (c) |
the effecting and carrying out of contracts to pay annuities on human life,
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and any business incidental to insurance business as so defined but does not include—
| (i) |
business in relation to the benefits provided by a friendly society or trade union for its members or their dependants;
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| (ii) |
business in relation to the benefits provided for its members or their dependants by an association of employees;
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| (iii) |
business in relation to a scheme or arrangement under which superannuation benefits, pensions or payments to employees or their dependants, and not to any other persons, on retirement, disability or death are provided by an employer or his employees or by both, wholly through an organization established solely for that purpose by the employer or his employees or by both;
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| (iv) |
business in relation to a scheme or arrangement for the provision of benefits consisting of—
| (A) |
the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or
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| (B) |
the payment of money, upon the death of a person, for the purpose of meeting the whole or a part of the expenses of and incidental to the funeral, burial or cremation of that person,
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and no other benefits, except benefits incidental to the scheme or arrangement;
| (v) |
business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind;
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| (vi) |
business declared by the Minister by notice in the Gazette not to be insurance business for the purposes of this Act;
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“insurance surveyors” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured;
“insurer” means a person, whether registered under this Act or not, who carries on insurance business and includes a reinsurer;
“intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;
“investigator” means the Commissioner or an investigator appointed under section 9;
“Kenya business” and “Kenya reinsurance business” means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, but do not include marine cargo insurance policies, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence;
“Kenya Government securities” means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;
“Kenya Reinsurance Corporation” means the body corporate established under section 129;
“life assurance” and “life assurance business” mean the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life;
“long term insurance business” includes insurance business of all or any of the following classes, namely, ordinary life assurance business, industrial life assurance business and bond investment business and includes, in relation to any insurer, business carried on by the insurer as incidental to any such class of business;
“loss adjuster” and “loss assessor” mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer or the insured;
“management expenses” means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;
“managing agent” means a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;
“member of the insurance industry” includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not;
“net liability” means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner;
“net premium” means the balance of the gross premium after deduction therefrom of any premium paid or payable by the insurer for reinsurance ceded;
"non-operating holding company" means a company, other than the insurer, which has control of an insurer and whose activities are limited to—
| (a) |
holding investments in its subsidiary;
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| (b) |
holding property used by group members;
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| (i) |
invest in, or to provide support to its subsidiary;
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| (ii) |
conduct its own activities;
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| (iii) |
provide administrative functions to;
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| (iv) |
support risk management; and
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| (v) |
provide financial services for efficient operation of the group.
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“ordinary life assurance business” means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies;
“ordinary life policy” means a policy of life assurance other than a policy of industrial life assurance;
“person” includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;
“policy”—
| (a) |
in relation to ordinary life assurance business or industrial life assurance business, includes an instrument evidencing a contract to pay an annuity upon human life;
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| (b) |
in relation to bond investment business, includes a bond, certificate, receipt or other instrument evidencing the contract with insurer; and
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| (c) |
in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue;
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“policy-holder” means the person who for the time being is the legal holder of the policy for securing the contract with the insurer;
“premium” includes the consideration for the granting of an annuity;
“principal officer” means an officer appointed under section 68;
“registration” means registration under this Act and includes a renewal of registration;
“regulations” and “rules” mean regulations and rules made under this Act;
“reinsurer” means a person who carries on reinsurance business and includes a retrocessionaire;
“reinsurance business” means the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;
“related”, in relation to an insurer, means—
| (a) |
a dependant of that insurer;
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| (b) |
a company of which the insurer is a dependant; or
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| (c) |
a dependant of a company of which the insurer is a dependant;
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“retrocession” means the reinsurance of reinsurance business accepted by a reinsurer;
“retrocessionaire” means a person reinsuring a reinsurer;
“risk manager” means a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;
“statutory fund” means the fund established under section 45;
“subsidiary” has the meaning assigned to it in section 154 of the Companies Act;
“tax” means the premium tax payable under this Act;
“Tribunal” means the tribunal established under section 169;
“vesting age” means—
| (a) |
the age of eighteen years; or
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| (b) |
an age of not less than ten years on or after the attainment of which by the child it is specified in the policy that sums payable in respect of the policy by the insurer who issued it shall be paid to the child or his executors, administrators or assigns.
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| (2) |
An insurer shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business remains unsatisfied and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specifically provided in any other section thereof, in relation to that class of business.
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| 2. |
Interpretation
| (1) |
In this Act, unless the context otherwise requires—
“actuary” means—
| (a) |
a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or
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| (b) |
such other person having actuarial knowledge as the Commissioner may, on the application of a member of the insurance industry, approve;
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“admitted asset” means any property, security, item or interest of a person permitted or required by or under section 42 to be regarded as an admitted asset;
“admitted liability” means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability;
“Advisory Board” means the board established by section 157;
“affairs”, in relation to a person or to a person associated with another person, includes—
| (a) |
the promotion, formation, membership, control, trading, dealings, business and property of the person;
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| (b) |
the ownership of shares in, debentures of and interests made available by the person;
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| (c) |
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to influence materially the policy of the person; and
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| (d) |
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person;
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“agent” means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;
“appointed date” means the date specified in section 1 for the coming into force of this Act;
“asset” includes any property, security, item or interest of a person;
“auditor” means a person who is qualified to be appointed an auditor of a company under section 161 of the Companies Act;
“bank” has the meaning assigned to it in the Banking Act ( Cap. 488);
“bond investment business” means the business of issuing bonds or endowment certificates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business;
“broker” means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, fee, allowance, return, or otherwise for or on behalf of an insurer, policy-holder or proposer for insurance or reinsurance; but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya;
“certified” means certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;
“Chairman” means the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;
“child’s advancement policy” means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions:
| (a) |
provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age;
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| (b) |
provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age;
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“claims settling agent” means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;
“Commissioner” means the officer appointed under section 3;
“Company” means the Kenya Reinsurance Corporation Limited;
“contract of insurance” includes a contract of reinsurance;
“court” means the High Court;
“dependent”, in relation to a company, means—
| (a) |
that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or
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| (b) |
that the first-mentioned company is a dependent of a company which is that other company’s dependent;
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“director” means a person occupying the position of a director by whatever name he may be called;
“document” includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;
“financial institution” has the meaning assigned to it in the Banking Act ( Cap. 488) and includes a mortgage finance company within the meaning of that Act;
“financial year” means the calendar year;
“general insurance business” means insurance business of any class or classes not being long term insurance business;
“gross direct premium” means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of—
| (a) |
any premium payable in respect of mandatory cessions falling under section 145 of this Act;
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| (b) |
any other reinsurance premium ceded;
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“gross liability” means liability before deducting any part of it which is re-insured;
“gross premium” means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;
“industrial life assurance business” means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work;
“insurance business” means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes—
| (a) |
the effecting and carrying out by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums;
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| (b) |
the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts;
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| (c) |
the effecting and carrying out of contracts to pay annuities on human life,
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and any business incidental to insurance business as so defined but does not include—
| (i) |
business in relation to the benefits provided by a friendly society or trade union for its members or their dependants;
|
| (ii) |
business in relation to the benefits provided for its members or their dependants by an association of employees;
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| (iii) |
business in relation to a scheme or arrangement under which superannuation benefits, pensions or payments to employees or their dependants, and not to any other persons, on retirement, disability or death are provided by an employer or his employees or by both, wholly through an organization established solely for that purpose by the employer or his employees or by both;
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| (iv) |
business in relation to a scheme or arrangement for the provision of benefits consisting of—
| (A) |
the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or
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| (B) |
the payment of money, upon the death of a person, for the purpose of meeting the whole or a part of the expenses of and incidental to the funeral, burial or cremation of that person,
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and no other benefits, except benefits incidental to the scheme or arrangement;
| (v) |
business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind;
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| (vi) |
business declared by the Minister by notice in the Gazette not to be insurance business for the purposes of this Act;
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“insurance surveyors” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured;
“insurer” means a person, whether registered under this Act or not, who carries on insurance business and includes a reinsurer;
“intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;
“investigator” means the Commissioner or an investigator appointed under section 9;
“Kenya business” and “Kenya reinsurance business” means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, but do not include marine cargo insurance policies, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence;
“Kenya Government securities” means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;
“Kenya Reinsurance Corporation Limited” has the meaning assigned to it in section 2 of the Kenya Reinsurance Corporation Act, 1997 ( Cap. 487A);
“life assurance” and “life assurance business” mean the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life;
“long term insurance business” includes insurance business of all or any of the following classes, namely, ordinary life assurance business, industrial life assurance business and bond investment business and includes, in relation to any insurer, business carried on by the insurer as incidental to any such class of business;
“loss adjuster” and “loss assessor” mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer or the insured;
“management expenses” means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;
“managing agent” means a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;
“member of the insurance industry” includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not;
“net liability” means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner;
“net premium” means the balance of the gross premium after deduction therefrom of any premium paid or payable by the insurer for reinsurance ceded;
“ordinary life assurance business” means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies;
“ordinary life policy” means a policy of life assurance other than a policy of industrial life assurance;
“person” includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;
“policy”—
| (a) |
in relation to ordinary life assurance business or industrial life assurance business, includes an instrument evidencing a contract to pay an annuity upon human life;
|
| (b) |
in relation to bond investment business, includes a bond, certificate, receipt or other instrument evidencing the contract with insurer; and
|
| (c) |
in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue;
|
“policy-holder” means the person who for the time being is the legal holder of the policy for securing the contract with the insurer;
“premium” includes the consideration for the granting of an annuity;
“principal officer” means an officer appointed under section 68;
“registration” means registration under this Act and includes a renewal of registration;
“regulations” and “rules” mean regulations and rules made under this Act;
“reinsurer” means a person who carries on reinsurance business and includes a retrocessionaire;
“reinsurance business” means the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;
“related”, in relation to an insurer, means—
| (a) |
a dependant of that insurer;
|
| (b) |
a company of which the insurer is a dependant; or
|
| (c) |
a dependant of a company of which the insurer is a dependant;
|
“retrocession” means the reinsurance of reinsurance business accepted by a reinsurer;
“retrocessionaire” means a person reinsuring a reinsurer;
“risk manager” means a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;
“statutory fund” means the fund established under section 45;
“subsidiary” has the meaning assigned to it in section 154 of the Companies Act;
“tax” means the premium tax payable under this Act;
“Tribunal” means the tribunal established under section 169;
“vesting age” means—
| (a) |
the age of eighteen years; or
|
| (b) |
an age of not less than ten years on or after the attainment of which by the child it is specified in the policy that sums payable in respect of the policy by the insurer who issued it shall be paid to the child or his executors, administrators or assigns.
|
|
| (2) |
An insurer shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business remains unsatisfied and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specifically provided in any other section thereof, in relation to that class of business.
|
|
| 2. |
Interpretation
| (1) |
In this Act, unless the context otherwise requires—
“actuary” means—
| (a) |
a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or
|
| (b) |
such other person having actuarial knowledge as the Commissioner may, on the application of a member of the insurance industry, approve;
|
“admitted asset” means any property, security, item or interest of a person permitted or required by or under section 42 to be regarded as an admitted asset;
“admitted liability” means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability;
“Advisory Board” means the board established by section 157;
“affairs”, in relation to a person or to a person associated with another person, includes—
| (a) |
the promotion, formation, membership, control, trading, dealings, business and property of the person;
|
| (b) |
the ownership of shares in, debentures of and interests made available by the person;
|
| (c) |
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to influence materially the policy of the person; and
|
| (d) |
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person;
|
“agent” means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;
“appointed date” means the date specified in section 1 for the coming into force of this Act;
“asset” includes any property, security, item or interest of a person;
“auditor” means a person who is qualified to be appointed an auditor of a company under section 161 of the Companies Act;
“bank” has the meaning assigned to it in the Banking Act ( Cap. 488);
“bond investment business” means the business of issuing bonds or endowment certificates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business;
“broker” means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, fee, allowance, return, or otherwise for or on behalf of an insurer, policy-holder or proposer for insurance or reinsurance; but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya;
“certified” means certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;
“Chairman” means the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;
“child’s advancement policy” means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions:
| (a) |
provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age;
|
| (b) |
provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age;
|
“claims settling agent” means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;
“Commissioner” means the officer appointed under section 3;
“Company” means the Kenya Reinsurance Corporation Limited;
“contract of insurance” includes a contract of reinsurance;
“court” means the High Court;
“dependent”, in relation to a company, means—
| (a) |
that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or
|
| (b) |
that the first-mentioned company is a dependent of a company which is that other company’s dependent;
|
“director” means a person occupying the position of a director by whatever name he may be called;
“document” includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;
“financial institution” has the meaning assigned to it in the Banking Act ( Cap. 488) and includes a mortgage finance company within the meaning of that Act;
“financial year” means the calendar year;
“general insurance business” means insurance business of any class or classes not being long term insurance business;
“gross direct premium” means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of—
| (a) |
any premium payable in respect of mandatory cessions falling under section 145 of this Act;
|
| (b) |
any other reinsurance premium ceded;
|
“gross liability” means liability before deducting any part of it which is re-insured;
“gross premium” means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;
“industrial life assurance business” means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work;
“insurance business” means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes—
| (a) |
the effecting and carrying out by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums;
|
| (b) |
the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts;
|
| (c) |
the effecting and carrying out of contracts to pay annuities on human life,
|
and any business incidental to insurance business as so defined but does not include—
| (i) |
business in relation to the benefits provided by a friendly society or trade union for its members or their dependants;
|
| (ii) |
business in relation to the benefits provided for its members or their dependants by an association of employees;
|
| (iii) |
business in relation to a scheme or arrangement under which superannuation benefits, pensions or payments to employees or their dependants, and not to any other persons, on retirement, disability or death are provided by an employer or his employees or by both, wholly through an organization established solely for that purpose by the employer or his employees or by both;
|
| (iv) |
business in relation to a scheme or arrangement for the provision of benefits consisting of—
| (A) |
the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or
|
| (B) |
the payment of money, upon the death of a person, for the purpose of meeting the whole or a part of the expenses of and incidental to the funeral, burial or cremation of that person,
|
|
and no other benefits, except benefits incidental to the scheme or arrangement;
| (v) |
business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind;
|
| (vi) |
business declared by the Minister by notice in the Gazette not to be insurance business for the purposes of this Act;
|
“insurance surveyors” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured;
“insurer” means a person, whether registered under this Act or not, who carries on insurance business and includes a reinsurer;
“intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;
“investigator” means the Commissioner or an investigator appointed under section 9;
“Kenya business” and “Kenya reinsurance business” means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, including marine cargo insurance policies for commercial imports, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence;
“Kenya Government securities” means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;
“Kenya Reinsurance Corporation Limited” has the meaning assigned to it in section 2 of the Kenya Reinsurance Corporation Act, 1997 ( Cap. 487A);
“life assurance” and “life assurance business” mean the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life;
“long term insurance business” includes insurance business of all or any of the following classes, namely, ordinary life assurance business, industrial life assurance business and bond investment business and includes, in relation to any insurer, business carried on by the insurer as incidental to any such class of business;
“loss adjuster” and “loss assessor” mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer or the insured;
“management expenses” means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;
“managing agent” means a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;
“member of the insurance industry” includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not;
“net liability” means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner;
“net premium” means the balance of the gross premium after deduction therefrom of any premium paid or payable by the insurer for reinsurance ceded;
“ordinary life assurance business” means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies;
“ordinary life policy” means a policy of life assurance other than a policy of industrial life assurance;
“person” includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;
“policy”—
| (a) |
in relation to ordinary life assurance business or industrial life assurance business, includes an instrument evidencing a contract to pay an annuity upon human life;
|
| (b) |
in relation to bond investment business, includes a bond, certificate, receipt or other instrument evidencing the contract with insurer; and
|
| (c) |
in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue;
|
“policy-holder” means the person who for the time being is the legal holder of the policy for securing the contract with the insurer;
“premium” includes the consideration for the granting of an annuity;
“principal officer” means an officer appointed under section 68;
“registration” means registration under this Act and includes a renewal of registration;
“regulations” and “rules” mean regulations and rules made under this Act;
“reinsurer” means a person who carries on reinsurance business and includes a retrocessionaire;
“reinsurance business” means the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;
“related”, in relation to an insurer, means—
| (a) |
a dependant of that insurer;
|
| (b) |
a company of which the insurer is a dependant; or
|
| (c) |
a dependant of a company of which the insurer is a dependant;
|
“retrocession” means the reinsurance of reinsurance business accepted by a reinsurer;
“retrocessionaire” means a person reinsuring a reinsurer;
“risk manager” means a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;
“statutory fund” means the fund established under section 45;
“subsidiary” has the meaning assigned to it in section 154 of the Companies Act;
“tax” means the premium tax payable under this Act;
“Tribunal” means the tribunal established under section 169;
“vesting age” means—
| (a) |
the age of eighteen years; or
|
| (b) |
an age of not less than ten years on or after the attainment of which by the child it is specified in the policy that sums payable in respect of the policy by the insurer who issued it shall be paid to the child or his executors, administrators or assigns.
|
|
| (2) |
An insurer shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business remains unsatisfied and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specifically provided in any other section thereof, in relation to that class of business. [ Act No. 9 of 1989, Second Sch., Act No. 18 of 1986, Sch., Act No. 12 of 1987, s. 2, Act No. 20 of 1989, Sch., Act No. 7 of 1997, s. 13, Act No. 4 of 1999, s. 72.]
|
|
| 2. |
Interpretation
| (1) |
In this Act, unless the context otherwise requires—
“actuary” means—
| (a) |
a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or
|
| (b) |
such other person having actuarial knowledge as the Commissioner may, on the application of a member of the insurance industry, approve;
|
“admitted asset” means any property, security, item or interest of a person permitted or required by or under section 42 to be regarded as an admitted asset;
“admitted liability” means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability;
“Advisory Board” means the board established by section 157;
“affairs”, in relation to a person or to a person associated with another person, includes—
| (a) |
the promotion, formation, membership, control, trading, dealings, business and property of the person;
|
| (b) |
the ownership of shares in, debentures of and interests made available by the person;
|
| (c) |
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to influence materially the policy of the person; and
|
| (d) |
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person;
|
“agent” means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;
“appointed date” means the date specified in section 1 for the coming into force of this Act;
“asset” includes any property, security, item or interest of a person;
“auditor” means a person who is qualified to be appointed an auditor of a company under section 161 of the Companies Act;
“bank” has the meaning assigned to it in the Banking Act ( Cap. 488);
“bond investment business” means the business of issuing bonds or endowment certificates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business;
“broker” means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, for or on behalf of an insurer, policy-holder or proposer for insurance or reinsurance and includes a health management organisation; but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya;
“certified” means certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;
“Chairman” means the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;
“child’s advancement policy” means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions:
| (a) |
provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age;
|
| (b) |
provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age;
|
“claims settling agent” means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;
“Commissioner” means the officer appointed under section 3;
“Company” means the Kenya Reinsurance Corporation Limited;
“contract of insurance” includes a contract of reinsurance;
“court” means the High Court;
“dependent”, in relation to a company, means—
| (a) |
that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or
|
| (b) |
that the first-mentioned company is a dependent of a company which is that other company’s dependent;
|
“director” means a person occupying the position of a director by whatever name he may be called;
“document” includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;
“financial institution” has the meaning assigned to it in the Banking Act ( Cap. 488) and includes a mortgage finance company within the meaning of that Act;
“financial year” means the calendar year;
“general insurance business” means insurance business of any class or classes not being long term insurance business;
“gross direct premium” means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of—
| (a) |
any premium payable in respect of mandatory cessions falling under section 145 of this Act;
|
| (b) |
any other reinsurance premium ceded;
|
“gross liability” means liability before deducting any part of it which is re-insured;
“gross premium” means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;
“group life insurance and group business” means insurance on the lives of groups of persons formed for purposes other than that of purchasing a group life insurance policy;
“industrial life assurance business” means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work;
“insurance business” means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes—
| (a) |
the effecting and carrying out by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums;
|
| (b) |
the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts;
|
| (c) |
the effecting and carrying out of contracts to pay annuities on human life,
|
and any business incidental to insurance business as so defined but does not include—
| (i) |
business in relation to the benefits provided by a friendly society or trade union for its members or their dependants;
|
| (ii) |
business in relation to the benefits provided for its members or their dependants by an association of employees;
|
| (iv) |
business in relation to a scheme or arrangement for the provision of benefits consisting of—
| (A) |
the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or
|
|
and no other benefits, except benefits incidental to the scheme or arrangement;
| (v) |
business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind;
|
| (vi) |
business declared by the Minister by notice in the Gazette not to be insurance business for the purposes of this Act;
|
“insurance surveyors” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured;
“insurer” means a person, registered under this Act, who carries on insurance business and includes a reinsurer;
“intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;
“investigator” means the Commissioner or an investigator appointed under section 9;
“Kenya business” and “Kenya reinsurance business” means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, including marine cargo insurance policies for commercial imports, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence;
“Kenya Government securities” means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;
“Kenya Reinsurance Corporation Limited” has the meaning assigned to it in section 2 of the Kenya Reinsurance Corporation Act, 1997 ( Cap. 487A);
“life assurance” and “life assurance business” mean the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life;
“long term insurance business” includes insurance business of all or any of the following classes, namely, ordinary life assurance business, industrial life assurance business and bond investment business and includes, in relation to any insurer, business carried on by the insurer as incidental to any such class of business;
“loss adjuster” and “loss assessor” mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer or the insured;
“management expenses” means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;
“managing agent” means a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;
“medical insurance provider” means an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;
“member of the insurance industry” includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not;
“net liability” means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner;
“net premium” means the balance of the gross premium after deduction therefrom of any premium paid or payable by the insurer for reinsurance ceded;
“ordinary life assurance business” means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies;
“ordinary life policy” means a policy of life assurance other than a policy of industrial life assurance;
“person” includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;
“policy”—
| (a) |
in relation to ordinary life assurance business or industrial life assurance business, includes an instrument evidencing a contract to pay an annuity upon human life;
|
| (b) |
in relation to bond investment business, includes a bond, certificate, receipt or other instrument evidencing the contract with insurer; and
|
| (c) |
in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue;
|
“policy-holder” means the person who for the time being is the legal holder of the policy for securing the contract with the insurer;
“premium” includes the consideration for the granting of an annuity;
“principal officer” means an officer appointed under section 68;
“registration” means registration under this Act and includes a renewal of registration;
“regulations” and “rules” mean regulations and rules made under this Act;
“reinsurer” means a person who carries on reinsurance business and includes a retrocessionaire;
“reinsurance business” means the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;
“related”, in relation to an insurer, means—
| (a) |
a dependant of that insurer;
|
| (b) |
a company of which the insurer is a dependant; or
|
| (c) |
a dependant of a company of which the insurer is a dependant;
|
“retrocession” means the reinsurance of reinsurance business accepted by a reinsurer;
“retrocessionaire” means a person reinsuring a reinsurer;
“risk manager” means a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;
“statutory fund” means the fund established under section 45;
“subsidiary” has the meaning assigned to it in section 154 of the Companies Act;
“tax” means the premium tax payable under this Act;
“Tribunal” means the tribunal established under section 169;
“vesting age” means—
| (a) |
the age of eighteen years; or
|
| (b) |
an age of not less than ten years on or after the attainment of which by the child it is specified in the policy that sums payable in respect of the policy by the insurer who issued it shall be paid to the child or his executors, administrators or assigns.
|
|
| (2) |
An insurer shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business remains unsatisfied and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specifically provided in any other section thereof, in relation to that class of business. [ Act No. 9 of 1989, Second Sch., Act No. 18 of 1986, Sch., Act No. 12 of 1987, s. 2, Act No. 20 of 1989, Sch., Act No. 7 of 1997, s. 13, Act No. 4 of 1999, s. 72, Act No. 9 of 2003, s. 2.]
|
|
| 2. |
Interpretation
| (1) |
In this Act, unless the context otherwise requires—
“actuary” means—
| (a) |
a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or
|
| (b) |
such other person having actuarial knowledge as the Commissioner may, on the application of a member of the insurance industry, approve;
|
“admitted asset” means any property, security, item or interest of a person permitted or required by or under section 42 to be regarded as an admitted asset;
“admitted liability” means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability;
“affairs”, in relation to a person or to a person associated with another person, includes—
| (a) |
the promotion, formation, membership, control, trading, dealings, business and property of the person;
|
| (b) |
the ownership of shares in, debentures of and interests made available by the person;
|
| (c) |
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to influence materially the policy of the person; and
|
| (d) |
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person;
|
“agent” means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;
“appointed date” means the date specified in section 1 for the coming into force of this Act;
“assessment report” means any report in respect of a claim;
“asset” includes any property, security, item or interest of a person;
“auditor” means a person who is qualified to be appointed an auditor of a company under section 161 of the Companies Act;
“Authority” means the Insurance Regulatory Authority established by section 3;
“bank” has the meaning assigned to it in the Banking Act ( Cap. 488);
“Board” means the Board of Directors of the Authority constituted under section 3B;
“bond investment business” means the business of issuing bonds or endowment certificates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business;
“broker” means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, for or on behalf of an insurer, policy-holder or proposer for insurance or reinsurance and includes a health management organisation; but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya;
“certified” means certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;
“Chairman” means the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;
“child’s advancement policy” means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions:
| (a) |
provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age;
|
| (b) |
provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age;
|
“claims settling agent” means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;
“Commissioner” means the officer appointed under section 3E;
“Company” means the Kenya Reinsurance Corporation Limited;
“contract of insurance” includes a contract of reinsurance;
“court” means the High Court;
“dependent”, in relation to a company, means—
| (a) |
that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or
|
| (b) |
that the first-mentioned company is a dependent of a company which is that other company’s dependent;
|
“director” means a person occupying the position of a director by whatever name he may be called;
“document” includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;
“financial institution” has the meaning assigned to it in the Banking Act ( Cap. 488) and includes a mortgage finance company within the meaning of that Act;
“financial year” means the calendar year;
“general insurance business” means insurance business of any class or classes not being long term insurance business;
“gross direct premium” means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of—
| (a) |
any premium payable in respect of mandatory cessions falling under section 145 of this Act;
|
| (b) |
any other reinsurance premium ceded;
|
“gross liability” means liability before deducting any part of it which is re-insured;
“gross premium” means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;
“group life insurance and group business” means insurance on the lives of groups of persons formed for purposes other than that of purchasing a group life insurance policy;
“industrial life assurance business” means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work;
“insurance business” means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes—
| (a) |
the effecting and carrying out by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums;
|
| (b) |
the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts;
|
| (c) |
the effecting and carrying out of contracts to pay annuities on human life,
|
and any business incidental to insurance business as so defined but does not include—
| (i) |
business in relation to the benefits provided by a friendly society or trade union for its members or their dependants;
|
| (ii) |
business in relation to the benefits provided for its members or their dependants by an association of employees;
|
| (iv) |
business in relation to a scheme or arrangement for the provision of benefits consisting of—
| (A) |
the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or
|
|
and no other benefits, except benefits incidental to the scheme or arrangement;
| (v) |
business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind;
|
| (vi) |
business declared by the Minister by notice in the Gazette not to be insurance business for the purposes of this Act;
|
“insurance surveyors” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured;
“Insurance Training and Education Trust” means the Insurance Training and Education Trust declared as such by instruments of the trustees dated 3rd May, 1988;
“Insurance Training Levy” means the insurance training levy payable under section 197H;
“Insurance Premium Levy” means the insurance premium levy payable under section 197A;
“insurer” means a person, registered under this Act, who carries on insurance business and includes a reinsurer;
“intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;
“investigator” means the Commissioner or an investigator appointed under section 9;
“Kenya business” and “Kenya reinsurance business” means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, including marine cargo insurance policies for commercial imports, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence;
“Kenya Government securities” means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;
“Kenya Reinsurance Corporation Limited” has the meaning assigned to it in section 2 of the Kenya Reinsurance Corporation Act, 1997 ( Cap. 487A);
“life assurance” and “life assurance business” mean the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life;
“long term insurance business” includes insurance business of all or any of the following classes, namely, ordinary life assurance business, industrial life assurance business and bond investment business and includes, in relation to any insurer, business carried on by the insurer as incidental to any such class of business;
“loss adjuster” and “loss assessor” mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer or the insured;
“management expenses” means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;
“managing agent” means a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;
“medical insurance provider” means an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;
“member of the insurance industry” includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not;
“net liability” means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner;
“net premium” means the balance of the gross premium after deduction therefrom of any premium paid or payable by the insurer for reinsurance ceded;
“ordinary life assurance business” means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies;
“ordinary life policy” means a policy of life assurance other than a policy of industrial life assurance;
“person” includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;
“policy”—
| (a) |
in relation to ordinary life assurance business or industrial life assurance business, includes an instrument evidencing a contract to pay an annuity upon human life;
|
| (b) |
in relation to bond investment business, includes a bond, certificate, receipt or other instrument evidencing the contract with insurer; and
|
| (c) |
in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue;
|
“policy-holder” means the person who for the time being is the legal holder of the policy for securing the contract with the insurer;
“premium” includes the consideration for the granting of an annuity;
“principal officer” means an officer appointed under section 68;
“registration” means registration under this Act and includes a renewal of registration;
“regulations” and “rules” mean regulations and rules made under this Act;
“reinsurer” means a person who carries on reinsurance business and includes a retrocessionaire;
“reinsurance business” means the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;
“related”, in relation to an insurer, means—
| (a) |
a dependant of that insurer;
|
| (b) |
a company of which the insurer is a dependant; or
|
| (c) |
a dependant of a company of which the insurer is a dependant;
|
“retrocession” means the reinsurance of reinsurance business accepted by a reinsurer;
“retrocessionaire” means a person reinsuring a reinsurer;
“risk manager” means a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;
“statutory fund” means the fund established under section 45;
“subsidiary” has the meaning assigned to it in section 154 of the Companies Act;
“Tribunal” means the tribunal established under section 169;
“vesting age” means—
| (a) |
the age of eighteen years; or
|
| (b) |
an age of not less than ten years on or after the attainment of which by the child it is specified in the policy that sums payable in respect of the policy by the insurer who issued it shall be paid to the child or his executors, administrators or assigns.
|
|
| (2) |
An insurer shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business remains unsatisfied and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specifically provided in any other section thereof, in relation to that class of business. [ Act No. 9 of 1989, Second Sch., Act No. 18 of 1986, Sch., Act No. 12 of 1987, s. 2, Act No. 20 of 1989, Sch., Act No. 7 of 1997, s. 13, Act No. 4 of 1999, s. 72, Act No. 9 of 2003, s. 2, Act No. 11 of 2006, s. 2.]
|
|
| 2. |
Interpretation
| (1) |
In this Act, unless the context otherwise requires—
“actuary” means—
| (a) |
a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or
|
| (b) |
such other person having actuarial knowledge as the Commissioner may, on the application of a member of the insurance industry, approve;
|
“admitted asset” means any property, security, item or interest of a person permitted or required by or under section 42 to be regarded as an admitted asset;
“admitted liability” means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability;
“affairs”, in relation to a person or to a person associated with another person, includes—
| (a) |
the promotion, formation, membership, control, trading, dealings, business and property of the person;
|
| (b) |
the ownership of shares in, debentures of and interests made available by the person;
|
| (c) |
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to influence materially the policy of the person; and
|
| (d) |
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person;
|
“agent” means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;
“appointed date” means the date specified in section 1 for the coming into force of this Act;
“assessment report” means any report in respect of a claim;
“asset” includes any property, security, item or interest of a person;
“auditor” means a person who is qualified to be appointed an auditor of a company under section 161 of the Companies Act;
“Authority” means the Insurance Regulatory Authority established by section 3;
“bank” has the meaning assigned to it in the Banking Act ( Cap. 488);
“Board” means the Board of Directors of the Authority constituted under section 3B;
“bond investment business” means the business of issuing bonds or endowment certificates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business;
“broker” means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, for or on behalf of an insurer, policy-holder or proposer for insurance or reinsurance and includes a health management organisation; but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya;
“certified” means certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;
“Chairman” means the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;
“child’s advancement policy” means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions:
| (a) |
provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age;
|
| (b) |
provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age;
|
“claims settling agent” means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;
“Commissioner” means the officer appointed under section 3E;
“Company” means the Kenya Reinsurance Corporation Limited;
“contract of insurance” includes a contract of reinsurance;
“court” means the High Court;
“dependent”, in relation to a company, means—
| (a) |
that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or
|
| (b) |
that the first-mentioned company is a dependent of a company which is that other company’s dependent;
|
“director” means a person occupying the position of a director by whatever name he may be called;
“document” includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;
“financial institution” has the meaning assigned to it in the Banking Act ( Cap. 488) and includes a mortgage finance company within the meaning of that Act;
“financial year” means the calendar year;
“general insurance business” means insurance business of any class or classes not being long term insurance business;
“gross direct premium” means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of—
| (a) |
any premium payable in respect of mandatory cessions falling under section 145 of this Act;
|
| (b) |
any other reinsurance premium ceded;
|
“gross liability” means liability before deducting any part of it which is re-insured;
“gross premium” means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;
“group life insurance and group business” means insurance on the lives of groups of persons formed for purposes other than that of purchasing a group life insurance policy;
“industrial life assurance business” means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work;
“insurance business” means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes—
| (a) |
the effecting and carrying out by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums;
|
| (b) |
the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts;
|
| (c) |
the effecting and carrying out of contracts to pay annuities on human life,
|
and any business incidental to insurance business as so defined but does not include—
| (i) |
business in relation to the benefits provided by a friendly society or trade union for its members or their dependants;
|
| (ii) |
business in relation to the benefits provided for its members or their dependants by an association of employees;
|
| (iv) |
business in relation to a scheme or arrangement for the provision of benefits consisting of—
| (A) |
the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or
|
|
and no other benefits, except benefits incidental to the scheme or arrangement;
| (v) |
business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind;
|
| (vi) |
business declared by the Minister by notice in the Gazette not to be insurance business for the purposes of this Act;
|
“insurance surveyors” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured;
“Insurance Training and Education Trust” means the Insurance Training and Education Trust declared as such by instruments of the trustees dated 3rd May, 1988;
“Insurance Training Levy” means the insurance training levy payable under section 197H;
“Insurance Premium Levy” means the insurance premium levy payable under section 197A;
“insurer” means a person, registered under this Act, who carries on insurance business and includes a reinsurer;
“intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;
“investigator” means the Commissioner or an investigator appointed under section 9;
“Kenya business” and “Kenya reinsurance business” means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, including marine cargo insurance policies for commercial imports, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence;
“Kenya Government securities” means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;
“Kenya Reinsurance Corporation Limited” has the meaning assigned to it in section 2 of the Kenya Reinsurance Corporation Act, 1997 ( Cap. 487A);
“life assurance” and “life assurance business” mean the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life;
“long term insurance business” includes insurance business of all or any of the following classes, namely, ordinary life assurance business, industrial life assurance business and bond investment business and includes, in relation to any insurer, business carried on by the insurer as incidental to any such class of business;
“loss adjuster” and “loss assessor” mean persons who do the business of assessing, investigating, negotiating and settling losses on behalf of the insurer or the insured;
“management expenses” means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not included in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;
“managing agent” means a person, firm or company entitled to the management of the whole affairs of an insurer, by virtue of an agreement with the insurer, and under the control and direction of the directors except to the extent, if any, otherwise provided for in the agreement, and includes a person, firm or company occupying that position, by whatever name called;
“medical insurance provider” means an intermediary, other than a broker, concerned with the placing of medical insurance business with an insurer for, or in expectation of, payment by way of a commission, fee or other remuneration;
“member of the insurance industry” includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not;
“member of the insurance industry” includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settling agent, whether registered under this Act or not;
“net liability” means the liability assessed by an actuary at a valuation made by him and approved by the Commissioner;
“net premium” means the balance of the gross premium after deduction therefrom of any premium paid or payable by the insurer for reinsurance ceded;
“ordinary life assurance business” means life assurance business, being business of, or in relation to, the issuing of, or the undertaking of liability under, ordinary life policies;
“ordinary life policy” means a policy of life assurance other than a policy of industrial life assurance;
“person” includes a company, corporate body (whether incorporated by or under statute or statutory authority), association, association of underwriters, fund, natural person, partnership and scheme;
“policy”—
| (a) |
in relation to ordinary life assurance business or industrial life assurance business, includes an instrument evidencing a contract to pay an annuity upon human life;
|
| (b) |
in relation to bond investment business, includes a bond, certificate, receipt or other instrument evidencing the contract with insurer; and
|
| (c) |
in relation to other classes of business, includes an instrument under which there is for the time being an existing liability already accrued or under which any liability may accrue;
|
“policy-holder” means the person who for the time being is the legal holder of the policy for securing the contract with the insurer;
“premium” includes the consideration for the granting of an annuity;
“principal officer” means an officer appointed under section 68;
“registration” means registration under this Act and includes a renewal of registration;
“regulations” and “rules” mean regulations and rules made under this Act;
“reinsurer” means a person who carries on reinsurance business and includes a retrocessionaire;
“reinsurance business” means the business of undertaking liability to pay money to insurer or reinsurers in respect of contractual liabilities in respect of insurance business incurred by insurers or reinsurer and includes a retrocession;
“related”, in relation to an insurer, means—
| (a) |
a dependant of that insurer;
|
| (b) |
a company of which the insurer is a dependant; or
|
| (c) |
a dependant of a company of which the insurer is a dependant;
|
“retrocession” means the reinsurance of reinsurance business accepted by a reinsurer;
“retrocessionaire” means a person reinsuring a reinsurer;
“risk manager” means a person, his clients or employer with regard to a programme of minimizing losses arising through unforeseen events, and of minimizing the cost of such protection by physical or financial measures through insurance or any other means;
“statutory fund” means the fund established under section 45;
“subsidiary” has the meaning assigned to it in section 154 of the Companies Act;
“Tribunal” means the tribunal established under section 169;
“vesting age” means—
| (a) |
the age of eighteen years; or
|
| (b) |
an age of not less than ten years on or after the attainment of which by the child it is specified in the policy that sums payable in respect of the policy by the insurer who issued it shall be paid to the child or his executors, administrators or assigns.
|
|
| (2) |
An insurer shall be deemed to be carrying on business of a particular class so long as any liability in respect of that class of business remains unsatisfied and is not otherwise provided for, and shall be subject to all the provisions of this Act, save as is specifically provided in any other section thereof, in relation to that class of business. [ Act No. 9 of 1989, Second Sch., Act No. 18 of 1986, Sch., Act No. 12 of 1987, s. 2, Act No. 20 of 1989, Sch., Act No. 7 of 1997, s. 13, Act No. 4 of 1999, s. 72, Act No. 9 of 2003, s. 2, Act No. 11 of 2006, s. 2.]
|
|
| 2. |
Interpretation
| (1) |
In this Act, unless the context otherwise requires—
“actuary” means—
| (a) |
a Fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of the United States of America; or
|
| (b) |
such other person having actuarial knowledge as the Commissioner may, on the application of a member of the insurance industry, approve;
|
“admitted asset” means any property, security, item or interest of a person permitted or required by or under section 42 to be regarded as an admitted asset;
“admitted liability” means any obligation, whether actual, contingent or prospective, permitted or required by or under section 43 to be regarded as an admitted liability;
“affairs”, in relation to a person or to a person associated with another person, includes—
| (a) |
the promotion, formation, membership, control, trading, dealings, business and property of the person;
|
| (b) |
the ownership of shares in, debentures of and interests made available by the person;
|
| (c) |
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the person or are or have been able to control or to influence materially the policy of the person; and
|
| (d) |
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of or interests made available by the person;
|
“agent” means a person, not being a salaried employee of an insurer who, in consideration of a commission, solicits or procures insurance business for an insurer or broker;
“appointed date” means the date specified in section 1 for the coming into force of this Act;
“assessment report” means any report in respect of a claim;
“asset” includes any property, security, item or interest of a person;
“auditor” means a person who is qualified to be appointed an auditor of a company under section 161 of the Companies Act;
“Authority” means the Insurance Regulatory Authority established by section 3;
“bank” has the meaning assigned to it in the Banking Act ( Cap. 488);
“Board” means the Board of Directors of the Authority constituted under section 3B;
“bond investment business” means the business of issuing bonds or endowment certificates by which a company in return for subscriptions payable at periodic intervals contracts to pay the bond holder a sum or series of sums at a future date, not being life assurance business but including sinking fund or capital redemption insurance business;
“broker” means an intermediary concerned with the placing of insurance business with an insurer or reinsurer for or in expectation of payment by way of brokerage, commission, for or on behalf of an insurer, policy-holder or proposer for insurance or reinsurance and includes a health management organisation; but does not include a person who canvasses and secures reinsurance business from or to an insurer or broker in Kenya so long as that person does not undertake direct insurance business and does not have a place of business, or a resident representative, in Kenya;
“certified” means certified by a principal officer to be true and correct, a true copy or a correct translation (as the case may be) by endorsement on or attached to the document to be certified;
“Chairman” means the person for the time being presiding over the Board of Directors or other governing body of the member of the insurance industry;
“child’s advancement policy” means a policy effected, before a child has attained the age of eighteen years, by a person other than the child, which contains both of the following provisions—
| (a) |
provision for payment of a sum not exceeding the premiums paid and accumulated with interest to the executors, administrators or assigns of the child on his death before attaining the vesting age;
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| (b) |
provision for payment of a sum to the child or his assigns on his attaining an age not less than the vesting age;
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“claims settling agent” means a person who engages in the business of settling or negotiating insurance claims under policies issued by insurers whether in Kenya or outside Kenya;
“Commissioner” means the officer appointed under section 3E;
“Company” means the Kenya Reinsurance Corporation Limited;
“contract of insurance” includes a contract of reinsurance;
“court” means the High Court;
“dependent”, in relation to a company, means—
| (a) |
that another company, either alone or with any associate, is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the first-mentioned company; or
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| (b) |
that the first-mentioned company is a dependent of a company which is that other company’s dependent;
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“director” means a person occupying the position of a director by whatever name he may be called;
“document” includes accounts, deeds, letters, writings, books and any other records of information, however compiled, recorded or stored and whether in written or printed form, on microfilm or in any other form;
“financial institution” has the meaning assigned to it in the Banking Act ( Cap. 488) and includes a mortgage finance company within the meaning of that Act;
“financial year” means the calendar year;
“general insurance business” means insurance business of any class or classes not being long term insurance business;
“gross direct premium” means the premium after deductions of discounts, refunds and rebates of premium written by an insurer excluding any reinsurance premium accepted and before deduction of—
| (a) |
any premium payable in respect of mandatory cessions falling under section 145 of this Act;
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| (b) |
any other reinsurance premium ceded;
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“gross liability” means liability before deducting any part of it which is re-insured;
“gross premium” means the premium after deduction of discounts, refunds and rebates of premium but before deduction therefrom of any premium paid or payable by an insurer for reinsurance ceded, and includes premiums receivable by the insurer under reinsurance contracts accepted by the insurer;
“group life insurance and group business” means insurance on the lives of groups of persons formed for purposes other than that of purchasing a group life insurance policy;
“industrial life assurance business” means the business of effecting assurances on human life, premiums in respect of which are payable, at intervals not exceeding two months in each case, to collectors sent by the insurer to each owner of a policy, or to his residence or place of work;
“insurance business” means the business of undertaking liability by way of insurance (including reinsurance) in respect of any loss of life and personal injury and any loss or damage, including liability to pay damage or compensation, contingent upon the happening of a specified event, and includes—
| (a) |
the effecting and carrying out by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried out by the person effecting them) in return for the payment of one or more premiums;
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| (b) |
the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of capital redemption contracts;
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| (c) |
the effecting and carrying out of contracts to pay annuities on human life,
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and any business incidental to insurance business as so defined but does not include—
| (i) |
business in relation to the benefits provided by a friendly society or trade union for its members or their dependants;
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| (ii) |
business in relation to the benefits provided for its members or their dependants by an association of employees;
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| (iv) |
business in relation to a scheme or arrangement for the provision of benefits consisting of—
| (A) |
the supply of funeral, burial or cremation services, with or without the supply of goods connected with any such service; or
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and no other benefits, except benefits incidental to the scheme or arrangement;
| (v) |
business consisting of the effecting and carrying out, by a person carrying on no other insurance business, of contracts of such description as may be prescribed, being contracts under which the benefits provided are exclusively or primarily benefits in kind;
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| (vi) |
business declared by the Minister by notice in the Gazette not to be insurance business for the purposes of this Act;
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“insurance surveyors” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums including making suggestions for improvement of the risks; and, in the marine insurance business, includes a person who surveys or assesses the losses on behalf of the insured;
“Insurance Training and Education Trust” means the Insurance Training and Education Trust declared as such by instruments of the trustees dated 3rd May, 1988;
“Insurance Training Levy” means the insurance training levy payable under section 197H;
“Insurance Premium Levy” means the insurance premium levy payable under section 197A;
“insurer” means a person, registered under this Act, who carries on insurance business and includes a reinsurer;
“intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurer, but does not include a person who merely publishes invitations on behalf of, or to the order of, some other person;
“investigator” means the Commissioner or an investigator appointed under section 9;
“Kenya business” and “Kenya reinsurance business” means insurance business carried on by an insurer in respect of any person, human life, property or interest situated in Kenya, or in respect of which premiums are ordinarily payable in Kenya and include insurance business in respect of any vessel, hovercraft or aircraft registered or ordinarily located in Kenya and includes marine cargo insurance policies on all imports entering Kenya, including marine cargo insurance policies for commercial imports, but excludes marine cargo insurance policies issued on personal effects, goods and items imported into Kenya by returning residents or passengers entering Kenya for permanent or temporary residence;
“Kenya Government securities” means securities charged on the revenue of the Government or guaranteed fully as regards principal and interest by the Government;
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