Insurance watchdog hits road running
Posted by African Press International on May 5, 2008
Publisher: Korir, africanpress@getmail.no source.nation.ke
Story by JUSTUS ONDARI
The Insurance Regulatory Authority, an autonomous body expected to regulate the country’s troubled insurance industry, has been launched.
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| Finance Minister, Mr Amos Kimunya (left) listens to assistant minister Oburu Odinga, make a point during the launch of the Insurance Regulatory Authority at the Carnivore Restaurant on Wednesday night. Photo/MICHAEL MUTE |
And with its launch, came a warning that to insurers that they must get their act together.
Speaking during the launch, IRA chairman, Mr Steve Omenge Mainda, said insurers must conform to international norms and standards under a new risk-based regulatory philosophy.
In a move aimed at improving the industry’s poor image in the eyes of the public following the collapse of several companies such as United, Invesco and Lakestar, Mr Mainda said the insurers must adhere to capital adequacy and solvency requirements.
“IRA will require insurers to match their capital requirements with their appetite for underwriting risks and with the size and complexity of their business,” said the chairman during the launch on Wednesday evening at the Carnivore grounds in Nairobi.
The function was presided over by Finance Minister Amos Kimunya. Also present was his assistant, Dr Oburu Odinga. Mr Kimunya said the authority would enforce good corporate governance, early warning systems and protect policyholders.
The authority started its operations on May 1, 2007 following the enactment of the Insurance (Amendment) Act of December 2006. IRA takes over from the office of Commissioner of Insurance, a department in the Ministry of Finance set up in 1986.
Mr Kimunya said the authority’s creation is part of the public financial reforms that the government has been undertaking to increase efficiency and effectiveness of service delivery.
The minister urged the authority to replicate the success of other regulatory bodies around the world.
“IRA has the powers and independence necessary for successful regulation of the insurance industry, but with sufficient integration with the industry to allow for a continuous consultation,” said Mr Kimunya.
It joins other regulators in the financial sector – the Central Bank of Kenya, Kenya Revenue Authority, the Retirements Benefits Authority and the Capital Markets Authority.
The insurance industry received a gross premium income of about Sh40 billion last year and also contributed about 2.5 per cent to the GDP.
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