Name:

Registered Office:

— Postal

Address:

— Telegraphic

Address:

—Telex —Telephone

Location of Offices:

—Principal:

(give address)

—Branches:

(give address)

Incorporation:

—Place: —Date:

Insurance Business:

—Date of first licence:

—Date of Commencement

State here broker, agent or any other capacity in which the member is registered under the Act.

Please give information of number and type of shares held, amount, of shareholding and any other interest as per item 7(ii) of FORM INS. 30-1.

If the space herein is insufficient, please use additional paper.

Please mention in column (6) the reference number of the registration under the Insurance Act, 1984.

A copy of the memorandum of association or other instrument or document by which the applicant is constituted.

A copy of the articles of association or other rules of the applicant.

A certified copy of the published prospectus, if any.

A copy of each of the proposal and policy forms, endorsements and any form of written matter describing the terms or conditions of or the benefits to or likely to be derived from policies or intended to be used by the applicant.

Statements of the premium rates, advantages and terms and conditions to be offered in connection with insurance policies and details of the bases and formulae from which those rates have been calculated.

In connection with long term insurance business, a certificate by an actuary that the rates, advantages, terms and conditions proposed to be offered are sound and workable.

Detailed statement of assets and liabilities as at the date of application.

A description of all reserves with detailed descriptions of the method, bases and formulae for calculating each of the reserves.

A certificate from the Central Bank of Kenya specifying the amounts and details of deposits made by the applicant under section 32 of the Act.

Certified copies of reinsurance contracts.

the prescribed fee and a certified copy of the receipt should be enclosed.

A photo-copy of the certificate of incorporation.

Financial forecasts as required under regulation 7(b).

An estimate of sources of business as required under regulation 7(c).

A summary of reinsurance treaties as per regulation 7(d).

Copies or drafts agreements as per regulation 7(e).

Copies or drafts of any standard agreements with brokers and agents as per regulation 7(f).

In the case of long term insurance business, an actuary’s certificate with regard to adequacy of financing arrangements as per regulation 7(g).

In the case of a new insurer or a new class of insurance business of an existing insurer, estimates of cost of installation and other information as per regulation 7(h).

Copies of accounts, statements and reports laid before shareholders as per regulation 7(i).

In the case of an insurer carrying on long term insurance business, copies of valuation reports as per regulation 7(j).

Engineering insurance business — means the business of effecting and carrying out contracts of insurance of various perils arising out of plant and machinery, such as explosion or collapse of boilers, breakdown of electrical or mechanical plant and lifts and cranes, and resultant damage to the insured’s surrounding property and liability to third parties arising therefrom, also including contracts of insurance in respect of contract works covering damage to property on site however caused and third party liability arising therefrom. Fire insurance business—means the business of effecting and carrying out of contracts of insurance, otherwise than incidental to some other class of insurance business against loss of or damage to property due to fire, explosion, storm, and other occurrences customarily included among the risks insured against in fire insurance policies.

Fire insurance business — Domestic Risks means fire insurance of risks which are of private or personal use, that is, other than commercial or industrial use.

Fire insurance business— Industrial and Commercial risks means fire insurance of commercial or industrial risks which are not domestic risks.

Liability insurance business — means the business of effecting and carrying out contracts of insurance against risks of persons insured incurring liabilities to third parties not being risks arising out of, or in connection with the use of, motor vehicles or out of, or in connection with the use of, vessels or aircraft or risks incidental to the construction, repair or docking of vessels or aircraft.

Motor insurance business— Private vehicles means motor insurance of private vehicles i.e. vehicles not used for business or other commercial purposes.

Motor insurance business— Commercial vehicles means motor insurance of commercial vehicles used for business and other commercial purposes.

Personal Accident Insurance business— means the business of effecting and carrying out contracts of insurance against risks of the persons insured sustaining injury as the result of an accident or an accident of a specified class or dying as the result of an accident or of an accident of a specified class or becoming incapacitated in consequence of disease or of disease of a specified class, not being contracts of Long term insurance business.

Theft insurance business— means the business of effecting and carrying out contracts of insurance against loss of or damage to property due to theft or any other cause not covered under any other class and shall include the insurance of cash in transit, fidelity guarantee insurance and all risks insurance.

Workmen’s compensation insurance business— means the business of effecting and carrying out contracts of insurance against the liability of the employer to the employees in respect of any injury or disease arising out of and in the course of their employment.

Medical insurance business— means the insurance business of paying for medical expenses, including the business of covering disability or long term nursing or custodial care needs.

Micro-Insurance business— means the authorized insurance business that provides protection accessible to the low income population, against specific perils in exchange for regular provision payments proportionate to that risk and managed in accordance with generally acceptable insurance principles.

Miscellaneous insurance business— means the business of effecting and carrying out

contracts of insurance which are not principally or wholly of any type or types included in other classes of business but shall include insurance of bonds of all types, insurance of livestock and crop insurance.

A revenue account in the prescribed form should be prepared in respect of each class of business referred to in regulations 9 and 10.

The amount of premium is to be recorded in relation to the date on which the contract of insurance was incepted. In this connection “incepted” refers to the time when the liability to risk of the insurer under a contract of insurance commenced and, for this purpose, a contract providing permanent open cover should be deemed to commence on each anniversary date of the contract.

Premiums shall be shown less discounts, refunds and rebates.

Premiums, claims, surrenders and annuities shall be shown net of reinsurances and commissions shall be shown after taking into account commissions received on reinsurances ceded and commissions paid on reinsurances accepted.

If any sum has been deducted from an expenditure item and entered on the assets side of the Balance Sheet, the sum so deducted shall be shown separately.

All entries in the above forms shall be in respect of insurer’s total business i.e. Kenya business and outside Kenya business.

Particulars of each item of expense or income, as the case may be, included in and which accounts for more than ten percentum of the amount shown in respect of “other” income or “other” expenditure shall be given.

The basis on which reserves for unearned premium, unexpired risks and incurred but not reported claims in respect of each class of general insurance business were calculated should be stated by way of supplementary notes.

Where in respect of Aviation and/or Marine insurance business an insurer elects to account for the business on a three-year basis, he shall, in addition to the information furnished under Form INS. No. 54–1 (L.N. 108/2002), furnish the break-up in the Form INS. No. 54-3 (L.N. 108/2002), and also attach a certificate, signed by the same persons as are required to sign the revenue account, stating whether the fund carried forward for each of the three years of account is, in their opinion sufficient.

Separate balance sheets shall be furnished for General Insurance Business and for Long-Insurance Business.

The value of an asset or liability shall be the value of that asset or liability as determined in accordance with such criteria as may be prescribed by a professional body of accountants, if any, or in accordance with generally accepted accounting concepts, bases and policies or other generally accepted methods deemed by accountants practising in Kenya to be appropriate for insurers transacting business in Kenya.

Abstracts and statements shall be so arranged that the numbers and letters of the paragraph correspond with those of the provisions of section II of this Schedule.

The Actuary shall describe a valuation and the presentation of policy liabilities for the Insurer.

The Assumptions and method for determination of liability of policies shall be in accordance with generally accepted actuarial principles and as prescribed by the Authority.

The Actuary shall, in respect to long term Insurance, apply best estimate assumptions and allow for margins as prescribed by the Authority.

In regard to long term business, the average rate of interest earned or yielded in any year by the assets constituting a statutory fund shall, for the purpose of provision (5) or Part II of this Schedule, be calculated by dividing the interest of the year by the mean fund of the year; and for the purposes of any such calculation the interest of the year shall be taken to be the whole of the interest, dividends and rents credited to the statutory fund during the year after deductions of rates and taxes (any refund of rates or taxes made during the year being taken into account), and the mean fund of the year shall be ascertained by adding a sum equal to one half of the aggregate of the balance or balances of any revenue accounts or accounts and the balances of any reserve accounts in respect of the long-term insurance business to which the statutory fund relates at the beginning of the year to a sum equal to one half of the aggregate of balances of those account at the end of the year, and deducting from the aggregate of those two sums an amount equal to one half of the interest of the year.

Every abstract prepared in accordance with the requirements of Part II shall be signed by an actuary and shall contain a certificate to the effect that the Actuary is satisfied as to the accuracy of the valuation made for the purpose thereof and of the valuation data.

Notwithstanding the provisions of paragraph 6, the principal officer shall sign the certificate as to accuracy of the data and the actuary shall insert in the abstract a signed statement showing what precautions have been taken to ensure the accuracy of the data.

the valuation date.

the expense assumptions adopted taking into consideration the current and future expected experiences separately specified for each class of business.

the basis adopted in the distribution of surplus as between the insurer and policyholders, and how the basis was determined.

The actuary shall prepare the abstract of the Financial Condition Report in such form as shall be prescribed by the Authority.

The abstract of the Financial Condition Report shall outline material risks, their impact and implications to the financial condition of the insurer.

The abstract of the Financial Condition Report shall provide a statement on the recommendations intended to address each of the material risks identified.

The abstract of the Financial Condition Report shall provide a statement on the extent to which the insurer has addressed recommendations provided in the Financial Condition Report of the previous year.

For the purposes of this Schedule—

"Office Premiums" means the actual premiums received by the company and for which credit is taken in the valuation in connection with which any statement is prepared, it is also called the "Gross Premium";

"valuation date" means, in relation to any valuation, the date as at which the valuation is made.

PART II

The statements required to be prepared under this Part are the following:

The value placed upon the aggregate liabilities of a statutory fund in respect of policies by reason of the adoption of any basis of valuation shall not be less than it would have been if it had been calculated as prescribed by the Authority.

The actuary who makes the valuation shall certify whether, in his opinion, the value placed upon the aggregate liabilities of a statutory fund in respect of policies by the valuation is not less than the value which would have been placed upon those aggregate liabilities if it has been calculated as prescribed by the Authority.

The rates of mortality to be used in calculating the liability under a policy shall be as prescribed by the Authority.

The discount rates to be used in calculating the liability under a policy shall be as prescribed by the Authority.

The margins, in respect to long term Insurance, to be applied in addition to the best estimate assumptions shall be as prescribed by the Authority.

The liability calculated shall be the present value of all prospective cash flows.

All negative reserves shall be zeroised.

that in my opinion the value placed upon the aggregate liabilities relating to the ................(statutory fund) in respect of policies on the basis of valuation I have adopted is not less than what it would have been if the aggregate value had been calculated on the prescribed basis;

that necessary steps as required under section 58(5)(a) were taken; and

that I am satisfied that the value of assets I have adopted are on the basis of the auditor's certificates appended to the balance sheet, fully of the value so adopted.

Reference may be made to Part A of Third Schedule with regard to Class and Sub-Class of General insurance business.

All premium amounts shall be taken after deduction of return premiums and rebate and shall include extra or additional premiums. In this context, gross direct premiums shall mean premiums in respect of direct business, and inward reinsurance premiums shall mean amounts of premiums received by way of reinsurances accepted. Outward reinsurance premiums shall mean amounts of premiums ceded by way of reinsurance.

Amounts of commission which shall include brokerage fee or other remuneration paid to an intermediary shall be shown separately under appropriate headings and not deducted from premium amounts.

Claim amounts shall include claims expenses and amounts of outstanding claims provision shall include provision for incurred but not reported except where required to be shown separately.

Particulars of portfolio transfers made during the year should be furnished in a separate statement.

Care should be taken to ensure that the amounts stated in the various forms in this Schedule are consistent amongst themselves and with those in the revenue accounts.

If the space in any form is inadequate give the required information in a separate statement.

KRC means Kenya Reinsurance Corporation.

Africa Re means African Reinsurance Corporation.

In the case of Kenya Reinsurance Corporation or any other insurer doing only reinsurance business the limits of management expenses, excluding commission, shall be an amount not exceeding ten percentum of the total net premium income.

In respect of any policy (other than a policy for the whole term of life where the premiums are payable throughout life), on which the maximum number of annual premiums payable is fixed and premiums are of uniform amount, the paid up sum assured, exclusive of bonus, shall be the sum which bears to the original sum insured the same proportion as the number of complete month’s premiums which have been paid on the policy bears to the number of months premium originally payable.

In respect of any policy for the whole term of life (where the premiums are payable throughout life), the paid up sum assured, exclusive of bonus additions, shall be a sum the same proportion to the value of the policy as the sum of one shilling bears to the present value (at the attained age of the person whose life is insured) of the reversion in the sum of one shilling according to the contingency upon which the sum insured under the original policy was payable.

If it is the practice of an insurer to permit paid up policies to participate in profits and if the insurer’s actuary is of the opinion that the paid up value arrived at by the application of rule 1 or 2 of this Schedule should be reduced suitably, it may be so done with the approval of the Commissioner of Insurance.

(1) For the purpose of this scheme, the calculations shall be made as at the day immediately preceding that on which the first premium which has not been paid falls, or fell due.

There shall be added to the amount (exclusive of bonus additions) of any paid up policy calculated in accordance with rule 1 or rule 2, the amount of all reversionary bonuses declared upon (and still attaching to) the original policy.

The surrender value of a policy at any date shall be the present value (according to the contingency upon which the policy is payable) of the amount of the paid up policy which would be granted as at that date, determined according to the rules prescribed in the Twelfth Schedule or the amount payable at death if death were to occur at the date as at which the surrender value is calculated, whichever is the less.

For the purposes of section 145(1) of the Act, every insurer shall reinsure with the Corporation 20 per cent (twenty per cent) of each policy of general insurance issued or renewed in Kenya by the insurer:

Provided that this per centage shall be reduced by 5 per cent (five per cent) every year thereby ceasing to apply on the 1st January, 2000.

[L.N. 372/1995, r. 2.]

The premium payable by an insurer to the Corporation in respect of cessions made to the Corporation shall be a pro-rata share of the premium actually received or receivable by the insurer from the insured, on the risk re-insured without any deductions whatsoever.

Liability of the Corporation in respect of the prescribed percentage of each policy reinsured with the Corporation shall commence simultaneously with that of the ceding insurer.

Every insurer shall, other than for motor insurance and marine insurance businesses, render to the Corporation quarterly statement of account within 60 days of the last day of March, June, September and December of each year in such from as the Corporation may require.

In the case of motor insurance business, every insurer shall render to the Corporation not later than the 15th day of each month statements of account of all business written as motor insurance in the preceding month in such form as the Corporation may require.

In the case of marine insurance business, every insurer shall render to the Corporation quarterly statements of account within 45 days of the last day of March, June, September and December of each year in such form as the Corporation may require.

The settlement of monthly accounts in respect of motor insurance business shall be made at the time of rendering an account to the Corporation and where the account shows a balance in favour of the insurer the Corporation shall settle such an account within 7 days of confirmation of the account by the Corporation which shall in either case be within one month of the receipt of the accounts.

The Corporation shall pay the insurer a reinsurance commission at the following rates expressed as per centages of the premiums payable by the insurer:

For the purposes of section 145(2) of the Act, every insurer shall, with effect from 1st January, 1999 reinsure with the Kenya Reinsurance Corporation twenty per cent (20%) of each of his reinsurance treaties in respect of general business placed in the international reinsurance market:

Provided that this requirement shall cease to apply on 31st December, 2025 or on the date the Kenya Reinsurance Corporation Limited is privatized, whichever is earlier.

Every insurer shall submit to the Corporation copies of all its reinsurance treaties relating to its general insurance business which are in force at the commencement of these Regulations and those to be issued in future and any amendment thereto.

For the purposes of section 145(1) of the Act, every insurer shall reinsure with the Corporation 20% (twenty per cent) of each policy of long term insurance issued in Kenya by the insurer:

Provided that this per centage shall be reduced by 5 per cent (five per cent) every year thereby ceasing to apply on the 1st January, 2000.

In respect of any policy of endowment insurance or whole-life insurance or an allied class of insurance, the cessions under paragraph 1 shall be on a risk premium basis in accordance with the risk premium rates determined by the Corporation: the manual of risk premium rates and the table of amounts at risk shall be determined by the Corporation not less than three months prior to the date from which they are to be applied.

In respect of any other policy, the cessions under paragraph 1 shall be on the basis of the original terms of the policy, and the premium payable by an insurer to the Corporation shall be pro-rata share of the premium actually received or receivable by the insurer from the insured, on the risk reinsured, without any deduction whatsoever.

The liability of the Corporation in respect of the prescribed per centage of each policy reinsured with the Corporation shall commence simultaneously with that of the ceding insurer.

Every insurer shall render to the Corporation not later than the 15th day of each month statements of mandatory cessions in such form as the Corporation may require. In respect of policies insuring substandard lives and those having sums insured in excess of a certain amount on any one life as may be indicated by the Corporation, the statements shall be required to be rendered separately in such form and within such time limit as may be required by the Corporation.

The Corporation shall be informed at least 30 days before any proposed alteration in the terms of reinsurance treaties including the levels of a ceding company’s net retention (that is, liability after all reinsurances including compulsory cession) are to be put into effect.

Unless the Corporation agrees to any other arrangement, every insurer shall render to the Corporation quarterly statements of account within 60 days of the last day of March, June, September and December of each year in such form as the Corporation may require.

Settlements of the quarterly accounts shall be made at the time of rendering the accounts to the Corporation. Where an account shows a balance in favour of the insurer the Corporation shall settle such account within 7 days of confirmation of the account by the Corporation which shall in either case be within one month of receipt of the accounts.

Serial Number	Class of Business	Reinsurance Commission Rate
01	Aviation-Aircrew personal accident insurance	22½%
	Aviation-others	15%
02	Engineering	25%
03	Fire-Domestic	30%
04	Fire–Industrial	30%
05	Liability	25%
06	Marine-Cargo and other transit	22½%
	Marine-Hull	15%
07	Motor-Private	15%
08	Motor-Commercial	15%
09	Personal Accident	25%
10	Theft	25%
11	Workmen’s compensation	25%
12	Medical Insurance
13	Miscellaneous
	Bonds	15%
	Others	25%

Every insurer shall submit to the Corporation copies of its treaties relative to long term insurance business in force and those to be issued in future and any amendments thereto.

Name: ...............................................

Registered Office: ...................................

—Postal Address: .........................................

—Telegraphic Address: ....................................

—Telex: ................................. Telephone: .........

Location of Offices: ........................

—Principal: ..........................................

(Give address) ........................................

—Branches at: ........................................

Incorporation: .....................................

Place: ..................... Date: .........................

Insurance Broking Business ...............

—Date of first licence .........................

—Date of commencement ................................

Bankers: ............ .................. ......................

Name	Address	Since when
1. .................	.................	.................
2. .................	.................	.................
3. .................	.................	.................

Share Capital

NOTES: 1. State here broker, agent or any other capacity in which the Member is registered under the Act.