Insurers ask for more time to settle third party claims

The association commended the government’s for introducing a cap on liability for third party injury claims at Sh3 million per person per claim under Section 5 (iv).

There, however, still exists a disparity in the manner in which an injury or death claim is settled under Cap 405, it said.

To address this problem, the association proposes that a mechanism for structured payments be introduced under the Act similar to that prescribed under the recently enacted Work Injury Benefits Act, 2007 which shall not exceed the maximum prescribed under Section 5(iv).

“We further propose that no other proceedings should be filed after a claim is settled in accordance with the requirements of the structured payments under Cap 405,” it said.

The association has requested the minister to recognise by law AKI, Association of Insurance Brokers of Kenya (AIBK) and Insurance Institute of Kenya so that they can enforce their codes of conduct.

With the recent establishment of the Insurance Regulatory Authority, the association says that its legal recognition and that of AIBK, which players have been pursuing for many years, should now be accorded priority.

“This recognition will provide a means of strengthening governance of the industry through these bodies,” Mr Gichuhi said.

“Such recognition should be granted under the Insurance Act, as is the case in both Tanzania and Uganda.”

The recognition is expected to help create a legally acknowledged platform from which the industry would be able to engage the insurance regulator in continuous consultation and dialogue on matters concerning the orderly conduct of insurance business and sustainable growth of the industry.

It would further require every licensed insurer to subscribe to and conform to AKI’s code of conduct.

In addition, an insurer who refuses, neglects or fails to join the association or fails to conduct their business in accordance with sound insurance principles, practices and ethics prescribed by each respective association, may be suspended by the authority from transacting insurance business.

AKI also proposes the introduction of a requirement that every licensed broker should be a member of the Association of Insurance Brokers of Kenya and should subscribe to and conform to the association’s code of conduct.

Suspend broker

The authority may suspend a broker who fails to join the association or defaults in his or her obligation or fails to conduct their business in accordance with sound insurance principles, practices and ethics prescribed by each respective association.