ADVOKS GLOBAL · KENYA
Insurance Act
56. Audit and auditor’s certificate
Edition: 2023-12-11 · In force
56. Audit and auditor’s certificate
(1)The accounts of every insurer shall be audited annually by an auditor.(2)The auditor shall in a certificate relating to accounts and statements in respect of a financial year of an insurer, state whether—(a)the accounts and statements to which it relates appear to him to be in accordance with the Act and give particulars of any matters that do not appear to him to be so in accordance;(b)the accounting records of the insurer in respect of that year appear to him to have been properly kept and to record and explain correctly the transactions and financial position of the insurer and give particulars of accounting records that appear to him not to have been so kept and of transactions that appear to him not to have been so recorded;(c)in respect of that year, he has obtained the information and explanations that he requested and give particulars of information and explanations he requested but did not obtain;(d)he is satisfied that the accounts and statements referred to in paragraph (a) agree with the accounting records of the insurer and appear to him truly to represent the transactions and financial position of the insurer in respect of the financial year to which they relate and, if any of them appear to him to fail so to represent the transactions and financial position, give particulars of the failure;(e)amounts required by section 53 to be apportioned have been equitably apportioned and if they have not been so apportioned give particulars of the failure;(f)all management expenses wherever incurred in respect of the insurer’s business, whether directly or indirectly, have been fully debited in the revenue account or profit and loss account as expenses and, if they have not been so debited, give particulars of the amounts not so debited;(g)every reserve has been calculated in accordance with the method approved for the reserve by the Commissioner and, if they have not been so calculated, give particulars of the reserves not so calculated.(3)The auditor shall in addition issue in relation to the accounts the certificate required under the Companies Act (Cap. 486).(4)Every insurer shall, for the purposes of this section, appoint annually an auditor who is approved by the Commissioner.(5)If an insurer fails to appoint an approved auditor under subsection (4), or to fill any vacancy for an auditor which may arise, the Commissioner may appoint an auditor and fix the remuneration to be paid by the insurer to him.(6)The Commissioner may require an auditor to undertake the following duties in addition to those prescribed under subsections (2) and (3)—(a)to submit such additional information in relation to his audit as the Commissioner may consider necessary;(b)to carry out any other special audit or investigations; and(c)to submit a report on any of the matters referred to in paragraphs (a) and (b);and the insurer concerned shall remunerate the auditor in respect of the discharge by him of all or any of such additional duties.(7)If the auditor of an insurer fails to comply with the requirements of this Act, the Commissioner may remove him from office and appoint another person in his place—(8)A person shall not be qualified for appointment as an auditor of an insurer if he is—(a)a director, officer or employee of that insurer; or(b)a person who is a partner of a director, officer or employee of that insurer; or(c)a person who is an employee or employee of a director, officer or employee of that insurer; or(d)a person who is a director, officer or employee, of a person related to that insurer; or(e)a person who, by himself, or his partner or his employee, regularly performs the duties of secretary or accountant for that insurer; or(f)a firm or member of a firm of auditors of which any partner or employee falls within the above categories.(9)No duty to which an auditor of an insurer may be subject shall be—(a)regarded as contravened by reason of his communicating in good faith to the Commissioner, whether or not in response to a request made by him, any information or opinion on a matter to which this Act applies.(b)This subsection applies to any matter of which an auditor becomes aware in his capacity as an auditor or in the discharge of his duties under this Part and which relates to the business or affairs of the insurer.