ADVOKS GLOBAL · KENYA
Insurance Act
29. Appropriate reinsurance arrangements
Edition: 2023-12-11 · In force
29. Appropriate reinsurance arrangements
(1)Subject to subsection (3), no person shall be registered under section 31 except a person who has re-insurance strategies and arrangements, being strategies and arrangements approved by the Commissioner, for insurance of liabilities in respect of which persons, property or interests are, or are to be, insured by the insurer in the course of carrying on insurance business.(2)The Commissioner shall not approve arrangements strategies or for reinsurance made or proposed to be made unless the amount of premium and commission to be paid or the manner in which the amount of premium and commission are to be ascertained are specified in the contract of reinsurance.(3)The Commissioner shall not approve arrangements strategies or for reinsurance where, in the opinion of the Commissioner, the retention limits are too low or too high.(4)The Commissioner may, in determining whether to approve strategies and arrangements for reinsurance made, or proposed to be made, by an insurer, have regard to all matters that he considers relevant and in particular to—(a)the class or classes of insurance business carried on or proposed to be carried on by the insurer;(b)the amount of premiums received by or due to the insurer during his last preceding financial year in respect of each class of insurance business carried on by him;(c)the amount of premiums expected by the insurer during the next financial year in respect of each class of insurance business to be carried on by the insurer;(d)the size of contingency loading which can be built into the premium rates of the insurer;(e)the amount of reinsurance commissions received by or due to the insurer during his last preceding financial year in respect of each class of insurance business carried on by the insurer;(f)the amount of reinsurance commissions expected to be received by the insurer during the next financial year in respect of each class of insurance business to be carried on by the insurer;(g)the price of reinsurance;(h)the nature and value of the assets of the insurer;(i)the capital reserves of the insurer and cost of servicing capital, investment policy and investment income;(j)probability, number and size of losses expected and risk characteristics of the insurer’s portfolio;(k)inter-dependence of exposure units; and(l)the person or persons by whom the reinsurance is or is proposed to be undertaken.(5)The Cabinet Secretary, having regard to such matters as he considers relevant, may, by notice in writing, exempt an insurer, subject to such terms and conditions and for such period as he specifies in the notice, from the requirements of subsection (1).