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{
    "id": 699667,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/699667/?format=api",
    "text_counter": 92,
    "type": "speech",
    "speaker_name": "Hon. A.B. Duale",
    "speaker_title": "",
    "speaker": {
        "id": 15,
        "legal_name": "Aden Bare Duale",
        "slug": "aden-duale"
    },
    "content": "Thank you, Hon. Speaker. This Bill proposes to amend the Insurance Act and to introduce a new phenomenon called Takaful insurance. This is an insurance based on group participation, a group that guarantees each of their members against any defined law or damage. The Takaful insurance which is being introduced deals with facilitation on the issuance of regulations to cover the Takaful Insurance. This will enable the law to recognize Takaful insurance business and facilitate the financial inclusion of that type of business to our citizens and, more so, to people who profess the Islamic faith like me. The current conventional insurance, in one way or the other, will have a certain element of interest. Interest rate is a serious crime to people who profess Islamic faith. For the last five to seven years, Takaful, an Islamic form of insurance, was introduced in the market and tested. The Government now wants to introduce an amendment to legalise that type of insurance. This is a big stride. At the same time, it allows Kenyans who believe in other faiths to benefit from such product. Secondly and more importantly, the scope of investment as per the current Insurance Act is only limited to ordinary shares. This Bill seeks to expand the scope of investment by introducing new products or other forms of capital such as subordinated loans, share premiums, reserves or any other forms of capital as may be decided by the Insurance Regulatory Authority (IRA). Why do we want to increase the scope of investment? Why do we want to introduce more capital gains outside the ordinary shares that are provided for in the Insurance Act? This will encourage additional investment in the insurance sector without diluting the current stakeholders’ shareholding. As we introduce new capital investment, it should not affect the current stakeholders but ensure a very efficient compliant system. It also increases the capital requirements under the Insurance Act. If Members look at the Bill in totality, they will appreciate that it is dealing with the issue of capital requirement for different stages of an insurance company in terms of size. Hon. Speaker, under the Insurance Act, the method of determination of a solvency of any insurance company is based on the margin of solvency, which compares the admitted assets and liabilities. If you want to determine whether an insurance company has become insolvent, you just look at the margin. Currently, in law, you compare the margin with the admitted assets and liabilities of that company. This Bill tries to harmonise the principle of capital figures in a company as introduced in the Finance Act, 2015. This, again, will help the insurance sector to fully adopt a more comprehensive risk-based capital models. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}