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"id": 234804,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/234804/?format=api",
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"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
"slug": "amos-kimunya"
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"content": "Mr. Temporary Deputy Speaker, Sir, the principal objective of this Bill is to create an autonomous insurance regulatory authority through the conversion of the Department of Insurance of the Ministry of Finance. This move aims at upgrading the regulatory functions of the office of the Commissioner of Insurance and strengthen the powers and capacity of the regulator to enable it perform its role effectively and efficiently. Mr. Temporary Deputy Speaker, Sir, this Bill will provide for, among other things, the following: The first one is the establishment of the Authority. This is contained within Part Two of the Insurance Act, which is being amended to create the Insurance Regulatory Authority. The Authority will be a body corporate whose objects and functions shall be, among others, to ensure the effective administration, supervision, regulation and control of the business of insurance in Kenya. The second issue is that the management of the Authority shall rest in the Board of Directors of the Authority which shall comprise 11 members as indicated under Clause 3(b). The Chief Executive Officer of the Authority shall be the Commissioner of Insurance, and shall be competitively appointed by the Board in consultation with the Minister for Finance. The Board shall also appoint the Secretary to the Board and such officers or servants as necessary for the proper discharge of the functions of the Authority. Mr. Temporary Deputy Speaker, Sir, the Authority shall be funded by the Insurance Regulatory Authority Fund which shall consist of the proceeds of the insurance premium levy, monies or assets as may accrue or vest in the Authority in the course of the exercise of its powers, and such monies as may be allocated to the Authority by Parliament and monies from other sources provided for or donated or borrowed by the Authority. The Authority will primarily draw its funding from a levy on the insurance industry. Mr. Temporary Deputy Speaker, Sir, it is proposed that the insurance premium tax that is currently levied on the members of the industry will be converted into an insurance premium levy which will be used to fund the Authority. This would, as a matter of fact, revert the levy to its original purpose for financing the regulatory body. No new levy is being proposed as this would cause problems on the industry, bearing in mind that a monthly levy of 0.5 per cent of the premium for the policy holders compensation fund was introduced in 2004 and the industry is still paying another 0.2 per cent to the Insurance Training and Education Trust to run Insurance College. The licence fees and penalties from all the members of the insurance industry will however, continue to be remitted to the Exchequer. In terms of accountability of the Authority, the Board shall cause to be prepared the estimates of revenue and expenditure for the financial year of the Authority which, in line with all the others in Government, shall be for 12 months ending 30th of June of each year. The annual estimates shall be prepared at least three months prior to the commencement of the financial year to which they relate and shall be submitted to the Minister for approval. As in line with all the other Government departments, the accounts of the Authority shall be prepared in accordance with the Public Audit Act that was passed by this House. Mr. Temporary Deputy Speaker, Sir, the passing of this Act will lead to the repeal of Part 16 of the Insurance Act, because the appointment of the Board of Directors of the new Authority shall render the Insurance Advisory Board, which is appointed under Part 16 of the Insurance Act, obsolete. This part is, therefore, being proposed for repeal. November 14, 1006 PARLIAMENTARY DEBATES 3615 Mr. Temporary Deputy Speaker, Sir, touching on the Ministerial Exemption Power under Section 181 of the Insurance Act, the Minister for Finance has absolute powers to exempt a person from any of the provisions of the Act. It is proposed that this section be amended such that these powers are, from now on, exercised by the Minister on the advice of the Board of the Authority. It is further proposed that certain administrative responsibilities of implementing the Insurance Act which are currently being performed by the Minister will be transferred to the Board of the Authority. However, the oversight powers of the Minister under the Act would still be left untouched. Mr. Temporary Deputy Speaker, Sir, this is the basis on which we are proposing this Act for consideration by the House. It has been long over-due in terms of creating that oversight Authority to regulate our industry. Again, following the advice that we have received from the Departmental Committee on Finance, Planning and Trade, that we should also bring in the amendments that were coming through the Finance Bill to be considered alongside this Insurance (Amendment) Act, I am happy to report to the House that we will be introducing this at the Committee Stage and I hope I will have the opportunity of discussing this further with the relevant Committee of the House and Members so that we get the rationale and harmonise this and get the issues that we would have wanted for the stakeholders. Mr. Temporary Deputy Speaker, Sir, I also want to mention here that we are aware that the wider Insurance Act is over-due for review and over-haul. However, we propose to, first of all, create this Insurance Regulatory Authority which will then look through the Act and consult with all the stakeholders and hopefully, it will fast-track the bringing of the more comprehensive review of the Insurance Act which we can do perhaps, early next year, depending on how fast we can move in terms of getting this Authority up and running. Mr. Temporary Deputy Speaker, Sir, I believe the Bill is very straightforward. It is something we have been looking forward to, and I would be happy if we could pull together as Members and support the Bill and pass it so that we can have the required regulatory oversight for our insurance industry so it is not left behind by all the other sectors. With those remarks, I beg to move and ask hon. Karua to second, and urge hon. Members of this House to support the Bill."
}