About IRA Kenya

The Insurance Regulatory Authority is a statutory government agency established under the Insurance Act, CAP 487 of the Laws of Kenya to regulate, supervise and develop the insurance industry. It is governed by a Board of Directors which is vested with the fiduciary responsibility overseeing operations of the Authority and ensuring that they are consistent with provisions of the Insurance Act.

The Authority is the successor of the Office of the Commissioner of Insurance which came into existence with the enactment of the Insurance Act, CAP 487 in 1986. Prior to this, insurance regulation was based on the UK legislation under the Companies Act 1960.

In executing our mandate, we adhere to the core principles of objectivity, accountability and transparency in promoting not only compliance with the Insurance Act and other legal requirements by insurance/reinsurance companies and intermediaries but also sound business practices. We therefore practice regulation and supervision that enables industry players to be innovative and entrepreneural. Bearing in mind industry differences in terms of size, extent and complexity, necessitating changes in operating and investment decisions helps cut down on compliance costs. Since in the long run, this has impacts on productivity and growth of the insurance sector, the Authority deploys significant resources in monitoring market behaviors, compliance and solvency issues.

What We Do

The functions of the Authority are outlined in section 3A of the Insurance Act, CAP 487 as follows:

1. Ensure the effective administration, supervision, regulation and control of insurance and reinsurance business in Kenya
2. Formulate and enforce standards for the conduct of insurance and reinsurance business in Kenya
3. License all persons involved in or connected with insurance business, including insurance and reinsurance companies, insurance and reinsurance intermediaries, loss adjusters and assessors, risk surveyors and valuers
4. Advise the Government on the national policy to be followed in order to ensure adequate insurance protection and security for national assets and national properties
5. Issue supervisory guidelines and prudential standards from time to time, for the better administration of the insurance business of persons licensed under the Insurance Act
6. Conduct inquiries and share information with other regulatory authorities and to carry out any other related activities in furtherance of its supervisory role
7. Educate the public regularly on the right to independently select an underwriter or broker from a list of underwriters or brokers licensed by the Authority
8. Regulate the business of bancassurance offered by banks in the same manner as the ordinary insurance business, including capital requirements and disclosures
9. Undertake such other functions as may be conferred by the Insurance Act or any other written law

The Authority’s mandate is to regulate, supervise and promote the development of the insurance industry in Kenya.

The National Development Agenda for IRA

Insurance industry contributes to national development through providing broader insurance products and services, fostering enterpreneurial attitudes, encouraging investment, innovation, market dynamism and competition, offer social protection alongside the state the state, releasing pressure on public sector finance; enhancing financial antermediation , creating liquidity and mobilizing savings.

As major institutional investors, insurers pool resources and channel them towards investment opportunities thereby facilitating firms to access capital which contributes to national development.

2. Policy Framework

As one of the key pillars of the financial services sector, the insurance industry is indeed central to realization of financial services objectives as set out in the Vision 2030, a long-term development blueprint for the Country. With the aim of deepening financial services and enhancing access to and inclusion, the Vision 2030 recognizes that as the economy expands and disposable incomes rise, there will be growth in insurable assets thereby generating demand for insurance services.

To achieve this, the Vision 2030 emphasizes the need to improve efficiency and outreach of insurance service providers, which can be achieved through consolidation, public education campaign, and investment in new technology that will enable the sector widen its reach and coverage at minimal costs. In turn, this will result in increased contribution of insurance industry to the Gross Domestic Product (GDP).

3. Consumer Protection

With promulgation of the Constitution 2010 and enactment of the Consumer Protection Act 2012 among other laws, focus on the consumer has and will continue to considerably gain momentum. The implications of these changes is shifts in the nature of rights and responsibilities of a regulator viz a viz consumers of insurance services as regards access to information as well as standards of service delivery.

A central information problem that insurance consumers face is judging product quality due to the complexity of the contract, the contingent nature of many of the services provided (e.g. claims handling and payments) and the fact that services may be provided over time (e.g. investments). As a result, product quality is difficult to ascertain prior to purchase hence the need for regulatory oversight given implication of a consumer driven market and intermediation.