Insurance policyholders will enjoy a three-month grace period to help them cope with the effects of the coronavirus pandemic, the sector regulator has said.
The Insurance Regulatory Authority (IRA) said the moratorium would apply for both contributions for insurance covers and renewal of premiums.
“Insurers should avail policyholders a three-month grace period. The grace period may be over and above any contractual premium holidays already in place for existing policies,” said IRA Chief Executive Godfrey Kiptum in a statement.
This comes a few weeks after industry players agreed to cover patients affected by the pandemic following consultations with the regulator.
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The regulator warned insurers against introducing new product exclusions or changing terms of their product without informing them.
“Insurers should conduct and submit to the authority a stress and scenario testing, including updating of capital adequacy calculations and liquidity strains due to the effects of Covid-19,” said Mr Kiptum.
Kenya has ten broad categories of general insurance.
These are motor, medical, fire, aviation, engineering, liability, marine, personal accident, theft and workman’s compensation.
The sector has been grappling with rising claims that saw an underwriting loss of Sh2.97 billion in the last quarter of last year.
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The moratorium is expected to further strain insurers who are expected to continue settling claims for which premiums have been paid even for motor and medical insurance, which are notorious for fraudulent claims.