Kenya: New draft guidelines on bancassurance submitted to the central bank
The insurance regulator acted on complaints that banks were flouting industry rules.The insurance regulator has forwarded on Monday (January 5th) draft guidelines for banks offering bancassurance to the Central Bank of Kenya for final input and approval ahead of implementation.
Newspaper the Star reports that the Insurance Regulatory Authority was forced to submit these guidelines after insurance agents complained that banks were flouting industry rules on insurance
by dictating specific firms to their clients, limiting choice.
The proposed guidelines state that "the bancassurance agent shall not induce or compel a prospect to buy an insurance product of its principal. All prospects shall be allowed to decide out of their own volition, which insurance product they wish to buy and from which insurer".
The distribution of insurance products through banking networks - called bancassurance - is slowly developing in Kenya.
By facilitating access to insurance for borrowers, bancassurance contributes to reducing
risks and thus helps
access to credit.
Deputy Commissioner of Insurance, Agnes Ndirangu, told Capital FM last month that
have hindered the growth of insurance uptake in Kenya.
"For a population of more than 40 million people, a network of 140 insurance brokers is not enough and that explains why the penetration is still very low - at below four per cent."