Uganda: New draft regulations for banks to sell insurance
They are expected to become operational by December 2016.The Insurance Regulatory Authority (IRA) has issued draft regulations to create a framework for the selling of insurance products by banks, called bancassurance.
"Under the previous Financial Institutions Act, commercial banks were not allowed to sell insurance products. This constrained the expansion of insurance penetration. With the amendments to the law and issuance of regulations, this should boost insurance penetration in Uganda," said IRA's chief executive officer Kaddunabbi Ibrahim Lubega, quoted by The Monitor.
The deputy director of commercial banking supervision at the Bank of Uganda, Geodfrey Yiga, added that the reach of licensed financial institutions is broader than insurance companies', and that the central bank wants to diversify the range of services that they offer to turn them into "a one-stop-centre for financial products."
According to recent statistics from the IRA, Uganda's insurance penetration is currently only at 0.8 percent of GDP mainly due to the limited knowledge of the sector and a negative perception of the industry.
The regulations are expected to become operational by December 2016.