Nine insurance brokerage firms have been deregistered after failing to comply with the Insurance Act, effectively barring them from signing up any new business.
The nine include Arc Insurance, Berkley Insurance, Cherith Brooks Insurance, Faida Insurance, Family Insurance and Precious Insurance.
Others to lose their licences from the action by the Insurance Regulatory Authority (IRA) are Safron Insurance, Secular Insurance and Starlit Insurance.
The firms, which act as agents of insurance companies, earn commission from the underwriters based on the business they channel to them.
“The brokers were deregistered for failure to comply with the law,” said a source familiar with IRA’s enforcement action.The Insurance Act lays out several situations for which a broker can be deregistered including having inadequate capital, undergoing liquidation and being part of an illegal merger or acquisition.
Other bases for licence cancellation are dormancy and conducting business against public interest as determined by the finance minister.
IRA says in the notice that the nine brokers, all with their head offices in Nairobi, are not allowed to “carry on, transact, do, or handle any new or old business.”
Besides the brokers, the regulator also deregistered scores of other players in the sector in what is seen as a move to curb fraud that has seen insurers bleed millions of shillings.
Eleven insurance investigators including Brisk Insurance, Snarp Response Insurance, Mark Patrol, Timex Safety Solutions and Pelican Investigation Services lost their licences.
The regulator also deregistered nine insurance motor assessors including Auto Just Loss Assessors, Allied Assessors, Delta Motor Valuers and Assessors and Tech-Link Motor Consultants.
Motor vehicle insurance has one of the highest loss ratios in the industry at 53 per cent and 76 per cent respectively for commercial and private motor segment respectively.
Insurers have attributed some of the losses to fraud perpetrated by collusion among service providers including investigators, garages and assessors. An insurance surveyor, Toplis and Harding International, and a claims settling agent Stely Insurance were also deregistered.