Firms to be fined Sh200,000 for submitting insurance policy fees late
The government plans to amend the Insurance Act to make companies pay fines for late submission of policy fee.
In the proposal, insurance companies that fail to submit returns as prescribed by law cough a penalty of Sh200,000 and a further penalty of Sh10,000 for every day after the expiry date during which period the document remains un-submitted. The penalty shall be paid to the Policyholders Compensation Fund.
Insurance companies have been on the spot for delaying or failing to submit policy fee on behalf of the policyholders prompting the move to amend the law.
Insurance Bill
According to the Insurance (Amendment) Bill, 2019 tabled by Leader of Majority Aden Duale last week, an insurer shall prepare claim payments returns and submit them in a manner prescribed by the Insurance Regulatory Authority.
“It empowers the Authority to prescribe the manner of submission of various kinds of returns and provides a penalty for late submission, which shall be payable into the Policyholders’ Compensation Fund,” Duale explained.
The insurance classes targeted include life assurance, annuities, pensions (personal pension or deposit administration), Group Life, Group Credit.
Already penalties have been introduced for late payments to the National Hospital Insurance Fund (NHIF).
The NHIF Act requires defaulters to start paying a penalty equivalent to twice their monthly contribution for every month in default. The penalty was imposed to serve as a deterrent to defaulters and late payments.
