A Study on the Challenges in the Regulation of the Insurance Industry in Kenya
Koima, Augustine K
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The Kenyan insurance industry has experienced regulatory setback in the recent past. Over the past few years, the industry experienced rampant cases of unethical competition, low market capitalization, a drop in the level of professionalism and the winding up of insurance companies as result of mismanagement. This study was therefore designed to identify factors considered as problems and emerging challenges in the regulation of the insurance industry in Kenya. The study establishes that both problems within the office of commissioner of insurance and other constraints and challenges concerning the industry in general have constrained the regulation of the insurance industry. In the office of commissioner of insurance constraints identified are: Inadequate analysis and slow response to remedy financially weak insurers, Lack of autonomy of action and freedom from interference by political and other groupings and Inability to have a dynamic influence in the evolution of the insurance industry. The study also identified the following constraints not specific to the commissioners office: Low levels of public awareness of insurance matters, underhand dealings in the conduct of operations at the commissioners' office, competition amongst some players in the insurance industry which reduce synergies in regulation, restricted scope of operation of the commissioners office, lack of legal recognition of other players in the insurance industry including AKl and the Insurance institute of Kenya (IlK). The conclusion is that an integrated approach encompassing both the cor office and other players in the industry at large should be employed to contain the existing constraints and meet emerging challenges in the regulation of the insurance industry. This study recommends that the cor office be actively involved in the education of the public on insurance matters, that the terms and conditions of the staff in the office be improved, that the office should have an active research arm to continually analyze emerging regulatory challenges and give recommendations. Others include the amendment of the insurance Act to create an independent and autonomous authority to manage the affairs of the insurance industry and the introduction of self-regulation in the industry.
University of Nairobi
RightsAttribution-NonCommercial-NoDerivs 3.0 United States
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