I have put the first word in bold to try to get your attention, as this is an extremely important announcement and, whilst the headline is enough to send any ‘insomniac’ to sleep, it affects us and all our clients equally.
With effect from 23rd July 2019, two major changes have been made to the Kenyan Insurance Act, which affects us at JWS, but also our clients.
Very simply, no cover can be ‘assumed’ by an Insurer in Kenya without premium payment up front, i.e. before cover incepts. Secondly, and something that affects Brokers more than you, is that all payments must be payable to Insurers. Brokers are no longer allowed to handle client’s money (premiums).
We were told about these changes after 23rd July, and failure to comply with the first change means our clients will have no cover and be exposed, and in respect of the second change, it is a criminal offence, punishable with a fine or up to 3 months prison!
Our industry association is trying to fight the matter, but as of today, it is law.
We don’t intend to go into the reasons behind this decision or our opinions of same, but the law has been introduced and we therefore need to address it, unless and until it is changed or relaxed. So, what are we doing about it at JWS?
Firstly, we will be sending a formal announcement out with each renewal or new business we handle, explaining that cover can only be incepted or renewed on receipt of the full premium by Insurers from our client. Where clients have paid late, you will be exposed. If you have used Insurance Premium Finance (IPF), then the facility must be in place and premiums funded to Insurers before inception or expiry. There is no leeway on this, Insurers are subject to penalties, the same as Brokers are.
Of course, it will be essential that all clients are given plenty of time and notice to make payment arrangements, so in respect of renewals, we will aim to have these to you two weeks before expiry, or ideally, one month. Sometimes, it is just not possible, owing to information being required. We will do what we can. For new business, please provide us with as much notice as possible, to enable us to facilitate any change to your insurance provider.
Rest assured JWS are already currently working on a workable solution with 5 major Insurers including ensuring they have in place secure and convenient payment methods and we hope to have some positive news shortly.
In the meantime, if you have any questions, please do get in touch directly with your Account Handler at JWS and they would be more than happy to answer any questions you may have.