ADVOKS GLOBAL · KENYA
Insurance Act
196. Cancellation of license
Edition: 2023-12-11 · In force
196. Cancellation of license
(1)(1) Where a licensed person requests, by notice in writing given to the Commissioner, that his license be cancelled either totally or in respect of any particular part of his business, the Commissioner may, subject to such terms and conditions as he considers necessary, by notice in writing, cancel the license of the person, either totally or respect of any particular part of his business.(2)The Commissioner, after giving a licensed person a reasonable opportunity of making representations, may by notice in writing cancel the licence of that person, either totally or in respect of any particular part of his business—(a)if the person fails to comply with or acts in contravention of this Act, or any regulation or direction made or issued under this Act;(b)in the case of an insurer, if the Commissioner has reason to believe that an amount due by the insurer under a judgment entered in an action in Kenya arising out of a policy of insurance issued by the insurer has remained unpaid for three months after the date of the final adjudication in that action;(c)if the Commissioner is satisfied that the business of the person licenced is not being conducted in accordance with sound insurance or business principles;(d)where, having regard to the financial circumstances of the person licenced, the Commissioner is satisfied that the person cannot carry on the business, or a part of the business, for which he is licenced, as the case may be, in a satisfactory and efficient manner;(e)where, having regard to the nature and quality of the staff of the licenced person, including the professional qualifications, knowledge and experience of the staff, the Commissioner is satisfied that the person cannot carry on the business, or a part of the business, for which he is licenced, as the case may be, in a satisfactory and efficient manner;(f)if the person is in liquidation;(g)if the business of the licenced person has been transferred to or amalgamated with the business of another person without the approval of the Cabinet Secretary;(h)in the case of an insurer, if the business of the insurer is wholly or to an unreasonable extent re-insured with another person;(i)where the Commissioner has reason to believe that the person licenced has not commenced to carry on insurance business or any class of business in Kenya within the period of twelve months after he was licenced;(j)where the Cabinet Secretary considers it is otherwise in the public interest and so directs the Commissioner in writing.(3)A cancellation of licence made by the Commissioner under subsection (2), other than paragraph (f), (g) or (i) thereof, shall take effect thirty days after the date of the notice, and after that time no insurer whose licence has been cancelled shall enter into a new contract of insurance; but all rights and liabilities in respect of contracts of insurance entered into by him before the cancellation takes effect shall, subject to subsection (5), continue as if the cancellation had not taken place.(4)The Commissioner may, with the prior approval of the Cabinet Secretary, revive a licence which has been cancelled under the provisions of subsection (2), other than paragraph (f), (g) or (i) thereof, if within six months from the date on which cancellation took place the registered person concerned satisfies the Commissioner that he has complied with any requirement of this Act or any subsidiary legislation made thereunder and complies with any further directions given to him by the Commissioner.(5)After the expiry of six months from the date on which the cancellation of licence of an insurer has taken effect under this section, the Commissioner may, with the prior approval of the Cabinet Secretary, apply to the court for a liquidation order in respect of the insurer.(5A)Subsection (5) does not apply if—(a)the licence of the insurer has been revived under subsection (4); or(b)an application for a liquidation order has already been made to the court in respect of the insurer.(6)(6) Where in any case referred to in subsection (1) the default or circumstances relates to one or more, but not all, of the parts of business carried on by the licensed person, the Commissioner may, with the prior approval of the Cabinet Secretary, upon the cancellation of the license of the person, subject to such terms and conditions as he considers necessary, license the person in respect of any part of the business and issue a new license in respect of that class of business.