alexa Brokers suffer setback in new insurance bill - Daily Nation

Brokers suffer setback in new insurance bill

Wednesday June 26 2019

National Assembly in session. PHOTO | FILE

National Assembly in session. PHOTO | FILE 

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Intermediaries such as brokers will no longer collect premiums from policyholders on behalf of insurance firms after MPs passed President Uhuru Kenyatta’s memorandum on the Insurance bill without amendments.

This comes after the National Assembly failed to raise at least two-thirds majority (233) of the 349 members to overturn the memorandum

This means that policyholders will be required to pay their premiums directly to the underwriters once the bill is assented to.

Currently, insurance brokers and agents are required to collect premiums and remit them to companies within 30 days.

The original bill, passed on February 28, 2019, sought to prevent the intermediaries from collecting premiums but MPs amended it to provide that they remit the premiums within 14 days.

However, the president rejected the bill through a memorandum. “An intermediary shall not receive any premiums on behalf of an insurer,” reads a new section of the bill introduced in the president’s memorandum to the National Assembly. It goes on to add; “No insurer shall assume a risk in respect of insurance business unless and until the premium payable thereon is received by the insurer.”