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{
    "id": 871925,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/871925/?format=api",
    "text_counter": 204,
    "type": "speech",
    "speaker_name": "Seme, ODM",
    "speaker_title": "Hon. (Dr.) James Nyikal",
    "speaker": {
        "id": 434,
        "legal_name": "James Nyikal",
        "slug": "james-nyikal"
    },
    "content": "Clause 17 of the Bill deals with the issue of orders, which was with the approval of the minister before. Now the Cabinet Secretary’s approval is not required. The commissioner can issue orders on what should be done to persons who are being investigated or how they should be handled. Again, it may give autonomy and make work faster, but it may also bring a lot of authority on the commissioner, which if there are no checks and balances, may again be misused. You will see the same on approval of registration. This now goes directly to the authority and removes the need for the approval by the Cabinet Secretary. Even approval of deposits and the power of giving deposits has been removed. Even the refund where somebody ceases to run the business of insurance and seeks back his deposit, that goes to the authority. This is good if the authority works well and we hope it will. Again, one starts to worry that we may have removed a lot of checks and balances that were in place. The main contention in this Bill, and this is the main point that I will make, was the issue the insurers had with the brokers. If you look at the amendment to Section 156, Clause 10, it says no insurer shall assume a risk in Kenya in respect of insurance business unless and until the premium payable thereon is received by the insurer. Absolutely, you do not need a broker. You need to go directly and make payment because if and until they receive the money, you do not have any cover and there is no point of having the brokers. Under Clause 10(2), an intermediary shall not receive any premiums on behalf of an insurer. If they are not receiving any payments and even if they do, the insurer will not take any responsibility until that is received. Do you need the intermediary? The question that was in this is whether we need the intermediaries at all. It goes on in 2, 3, and 4 to prescribe penalties for that. In my view, that was not desirable. I must congratulate the Committee for looking at that and in the amendments that they will bring we hope we will cure that. There was an element of payment of the brokers by the insurer. While I thought that would be okay, the arguments they have had is that within 30 days, the insurer will pay the intermediary. I do not see a problem with that, but there seems to be an issue. We will look at it when the time comes. That looks reasonable to me. My worry, as I said earlier, is this issue of index-based insurance. We have to look at it carefully. If you are looking at payment particularly in micro-insurance that have been introduced, it is close to this index-based insurance. I am concerned that we may be giving it with one hand and taking away with the other. I appreciate that perhaps when the main Act was being promulgated, the writers of the Act and the Legislature then may have been tired because in Section 204, they just said that in case of dispute, the Director of Public Prosecutions (DPP) will appoint a prosecutor and left it at that. This Bill states clearly how this matter shall be handled. Then the rest of it is prescribing penalties. We will look at the penalties, but it is important that any issues that deal with fraud, and seem to be detrimental to the insurance industry must be dealt with proper sanctions. With that, I support the Bill."
}