Short title:
Date of promulgation:
Date of commencement:
Download Original File:
ACTS SUPPLEMENT No. 7 2nd September, 2011. ACTS SUPPLEMENT to The Uganda Gazette No. 53 Volume CIV dated 2nd September, 2011. Printed by UPPC, Entebbe, by Order of the Government. |
Act 13 Insurance (Amendment) Act THE INSURANCE (AMENDMENT) ACT, 2011 ARRANGEMENT OF SECTIONS Section Part I—Amendments to Part I of The Principal Act
Part II—Amendments to Part II of The Principal Act
Part III—Amendments to Part III of The Principal Act
Part IV—Amendments to Part IV of The Principal Act
|
1 |
2011 |
Act 13 |
Insurance (Amendment) Act |
Section |
|
25. |
Amendment of section 42 of principal Act |
26. |
Amendment of section 44 of principal Act |
27. |
Repeal of subsection (1) of section 46 of principal Act |
28. |
Amendment of section 47 of principal Act |
29. |
Amendment of section 49 of principal Act |
30. |
Amendment of section 51 of principal Act |
31. |
Amendment of section 55 of principal Act |
|
Part V—Amendments to Part V of The Principal Act |
32. |
Amendment of section 59 of principal Act |
33. |
Amendment of section 64 of principal Act |
|
Part VI—Amendments to Part VII of The Principal Act |
34. |
Amendment of section 71 of principal Act |
Part VII—Insertion of Part Vii a to The Principal Act |
Part VIII—Amendments to Part VIII of The Principal Act
Part IX—Insertion of Part VIIIa to The Principal Act
Part X—Amendments to Part IX of The Principal Act
Part XI—Miscellaneous Amendments
|
2 |
Act 13 |
Insurance (Amendment) Act |
2011 |
THE INSURANCE (AMENDMENT) ACT, 2011 An Act to amend the Insurance Act; to provide definitions for the terms used in the Act; to provide for the regulation of health insurance, health membership insurance, micro insurance and bancassurance; to provide for the membership of the Insurance Institute of Uganda; to provide for the insurance training levy; to provide for the protection of the Authority from liability; to rename the Uganda Insurance Commission as the Insurance Regulatory Authority of Uganda; to provide for arbitration as an additional function of the Authority; to provide for the composition of the Authority; to provide additional grounds for winding up insurers; to provide for the establishment of the Policyholders’ Compensation Fund; to establish the Insurance Appeals Tribunal; to provide for an increase in the fines and for related matters. Date of Assent: 8th August, 2011. Date of Commencement: 2nd September, 2011. Be it enacted by Parliament as follows: 3 |
Act 13 Insurance (Amendment) Act 2011 Part I—Amendments to Part I of The Principal Act |
Section 1 of the Insurance Act, in this Act referred to as the principal Act, is amended by substituting for “risk inspectors” the words “risk managers”.
Section 2 of the principal Act is amended—
“actuary” means a person who is a member, an associate or a fellow of a professional institute, faculty, society or association of actuaries, recognized as such by the Authority and who is authorised by that institute, faculty, society or association to certify actuarial valuations of life insurance business; “admitted assets” includes any properties, security, items or interest of a person but does not include—
|
4 |
Act 13 |
Insurance (Amendment) Act 2011 |
“admitted liabilities” means liabilities shown as current contingents or as prospective liabilities in the accounts of an insurer and includes liabilities in respect of a policy of long term insurance business, but does not include—
“claim settling agent” means a person licensed under this Act to undertake the business of settling and negotiating the settlement of an insurance claim, on behalf of an insurer, under a policy issued by the insurer within or outside Uganda; “currency point” has the value assigned to it in Schedule 1; “director” means a director of the governing body of an insurer, a broker or an adjuster; “document” includes accounts, deeds, letters, writings, books and any other records of information however compiled, recorded or stored, whether in a written or printed form, on microfilm or in any other form; “health insurance organisation” means a person engaged in the business of undertaking liability in respect of funding healthcare, by way of insurance; “health membership organisation” means a person engaged in the business of undertaking liability in respect of funding healthcare, by way of membership; “insurance surveyor” means a person who engages in surveying risks and in advising on the rate and terms and conditions of premiums; |
“licence” means a licence issued under this Act; 5 |
Act 13 |
Insurance (Amendment) Act 2011 “life insurance fund” means the total of the reserves specified under section 47 (3); “loss assessor” means a person licensed under this Act to undertake the business of assessing and investigating losses and who may settle losses on behalf of an insurer or an insured; “micro insurance” means insurance for the protection of low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of risk involved; “non-life insurance fund” means the total of reserves specified under section 47 (2); “person” includes any company or association or body of persons corporate or unincorporated; “premium” means the consideration for entering into an insurance contract; “principal officer” means an officer responsible for the general control and supervision of the insurance business of a person licensed under this Act; “risk manager” means a person who does the business of minimising losses which arise from unforeseen events and who minimises the cost of the losses by arranging physical or financial measures through insurance or any other means; “Tribunal” means the Insurance Appeals Tribunal established under Part VIIIA of this Act;”; |
|
6 |
Act 13 Insurance (Amendment) Act 2011 “"loss adjuster" means a person registered under this Act to undertake the business of professional loss adjustment for and on behalf of an insurer, an insured or any other person and who may in addition settle claims on behalf of an insurer;”;
““Authority” means the Insurance Regulatory Authority of Uganda established under Part II of this Act;”.
section 5 of the principal Act is amended—
“(xiiia) health insurance; (xiiib) health membership; (xiiic) micro insurance; (xiiid) bancassurance;”;
“(2) No person shall transact the business of life insurance and non-life insurance as a composite company.”
section 6 of the principal Act is amended—
7 |
Insurance (Amendment) Act 2011
by inserting in subsection (2) the words “maintained at all by inserting immediately after subsection (3), the following— “(3a) Notwithstanding subsections (1) and (2), a health insurance organisation, a health membership organisation, a micro insurance organisation or an insurance company set up for the purposes of regional cooperation shall have a paid up capital as may be prescribed by regulations.”
Section 7 of the principal Act is amended—
“(1) Every insurer shall hold in an account maintained by the insurer for the purpose, a security deposit of at least 10 per cent of the capital of the insurer.”;
“(3) The deposits made under subsection (1) shall be invested by the insurer in Government securities or any other investment as may be approved by the Authority.”
Section 8 of the principal Act, is amended by substituting for “10 percent” appearing in paragraph (a), “50 percent”.
Section 11 of the principal Act is amended by inserting immediately after subsection (2), the following— “(3) A member of the board of directors of an insurance company shall not at the same time serve as a member of the board of directors of another insurance company or of an insurance brokerage company in Uganda.” 8 |
Act 13 (b) (c) |
Act 13 Insurance (Amendment) Act 2011
section 12 of the principal Act is amended by substituting for “as an officer” appearing in subsection (1), the words “for an insurance company”. Part II—Amendments to Part II of The Principal Act
Section 14 of the principal Act is amended by subsituting for “a Uganda Insurance commission” the words “the Insurance Regulatory Authority of Uganda”.
section 15 of the principal Act is amended—
“(c) approve texts of policies and proposal forms;”;
“(f) receive complaints from members of the public on the conduct of a person licensed under this Act and arbitrate and grant restitution to the complainant, as may be possible;”.
section 17 of the principal Act is amended—
“(ba) a representative of the Ministry responsible for finance, who shall be at the rank of director;”;
“(c) the chief Executive officer, who shall have no voting rights;”; |
9 |
Act 13 Insurance (Amendment) Act 2011 (c) by substituting for subsection (1) (d) the following— |
“(d) a representative of the Governor of the Bank of Uganda;”;
“(e) a representative of the Insurance Institute of Uganda, who shall not be a director, employee or shareholder of any insurer, intermediary, loss assessor or loss adjustor;”;
“(f) a person nominated by the Minister responsible for health, who shall not be a director, employee or shareholder of any person licensed under this Act;”;
following— “(6) A member of the Authority shall not disclose any information, or use any proprietary information, concerning a person licensed under this Act, obtained in the course of performance of his or her duties as a member of the Authority, for the purposes of attaining a business advantage or personal financial gain.”
Section 21 of the principal Act is amended by inserting immediately after subsection (2) the following— “(2a) The Chief Executive Officer shall hold office for a term of five years and shall be eligible for reappointment. (2b) The Chief Executive Officer shall be removed from office where he or she—
|
10 |
Act 13 Insurance (Amendment) Act 2011
Section 22 of the Principal Act, is amended by substituting for the word “secretary to the commission” the word “secretary to the Authority”.
section 24 of the principal Act, is amended by substituting for “the central bank” appearing in subsection (3), the word “Government”.
Section 25 of the principal Act, is amended by substituting for “central bank” appearing in paragraphs (a) and (b), the word “Minister”.
Section 26 of the principal Act, is amended by substituting for subsection (2) the following— “(2) The accounts and records of the Authority shall be kept in accordance with the Public Finance and Accountability Act, 2003.” |
11 |
Act 13 Insurance (Amendment) Act 2011 Part III—Amendments to Part III of The Principal Act |
Section 29 of the principal Act is amended by inserting at the end of subsection (2)(h) the words, “certified by an auditor approved by the Authority;”.
Section 32 of the principal Act is amended by substituting for subsection (2) (b) the following— “(b) may be renewed on application, in the prescribed form and after payment of the prescribed fees; and”.
Section 33 of the principal Act, is amended—
“(c) the relevant minimum prescribed paidup capital or security deposit requirements specified in Part 1 of this Act, have not been complied with by the insurer or that the net assets of the insurer are below the minimum prescribed paid up capital;”;
“(k) the insurer has refused or failed to abide by the decision of the Authority, to settle a claim or complaint in accordance with section 15 (2) (f).”;
“(5) An insurer may within thirty days from the receipt of the communication of the Authority of the suspension or revocation of his or her licence, appeal to the Tribunal”; |
12 |
Act 13 Insurance (Amendment) Act 2011 (e) by substituting for subsection (8) the following— |
“(8) The Authority shall publish in the Gazette and a newspaper widely read by the people in the area where the registered office of the affected insurer is located, any revocation or suspension of the licence of the insurer or any reinstatement or relicensing of the affected insurer, as soon as is practicable.”
The principal Act is amended by inserting immediately after section 33, the following— “33A. Licensing of health insurance organisations and health membership organisations
Part IV—Amendments to Part IV of the Principal Act
Section 34 of the principal Act, is amended—
“(1) An insurer shall not allow credit on the premium payable for more than thirty days from the date of the inception or renewal of the policy and may, subject to the provisions of the policy, opt out of the risk, except where the business emanated from an insurance broker licensed under this Act. |
13 |
Act 13 Insurance (Amendment) Act 2011
“(3) Where an insurer allows credit on premium under a policy, the insurer shall be liable to pay any claims that may arise from the policy.”
Section 37 of the principal Act is amended—
“(2) An insurer who violates this section is liable to a fine of twenty percent of the premium received or the fine imposed under section 97 (4) (b), whichever is higher.”
Section 40 of the principal Act is amended by substituting for "intermediary" the words "any other person".
Section 41 of the principal Act is repealed.
Section 42 of the principal Act is amended—
“(a) a loan on a life policy limited to the policy’s surrender value, where the right to borrow the same amount is also provided to the other policy holders of that class; or”;
|
14 |
Act 13 Insurance (Amendment) Act 2011 “(1a) Notwithstanding subsection (1), the total aggregate of the loan given to a director of an insurer shall not exceed ten percent of the paid up capital of the insurer.”
section 44 of the principal Act, is amended by substituting for subsection (1) (b) the following— “(b) in the case of non-life insurance business or reinsurance, the admitted assets of the insurer shall exceed the greater of—
subsection (1) of section 46 of the principal Act is repealed.
Section 47 of the principal Act, is amended—
“(b) reserves for outstanding claims, a sum equal to the total estimated amount of all outstanding reported claims together with an additional amount of not less than 15 per cent of the total amount of outstanding reported claims, in respect of claims incurred but not reported at the end of the last preceding year or such amount as the Authority may determine;”; 15 |
Act 13 Insurance (Amendment) Act 2011
“or such other amount as the Authority may decide”.
Section 49 of the principal Act, is amended—
“(1) An insurer shall within ninety days after the end of the financial year, prepare and furnish to the Authority, in the prescribed form—
“(1a) An insurer shall within one hundred and twenty days after the end of each financial year, prepare and furnish to the Authority, in the prescribed form, a certificate as to the insolvency of the insurer, signed in the case of the life insurer by an actuary or any other person authorised by the Authority.”;
“(2) An insurer shall each year furnish the Authority, as may be required by the Authority, with all essential information regarding its capitalisation, its reserves, the classes of insurance business it carries on and such other information as the Authority may require.”
Section 51 of the principal Act, is amended—
|
“(3) The auditor shall— 16 |
Act 13 Insurance (Amendment) Act 2011 |
|
“(3 a) The auditor of an insurer shall not audit the accounts of the insurer for a continuous period of more than four years and shall not be eligible for reappointment as auditor, within the proceeding four years.”
Section 55 of the principal Act, is amended—
“(3) The insurer shall, within one hundred and twenty days after the end of a financial year, send a copy of the report submitted to him or her under subsection (1), to the Authority.” Part V—Amendments to Part V of The Principal Act
Section 59 of the principal Act is amended by substituting for “one hundred and twenty days” the words “ninety days”. 17 |
Act 13 Insurance (Amendment) Act 2011 |
Section 64 of the principal Act, is amended—
“(c) a reinsurance company incorporated under the laws of Uganda, fifteen percent of its reinsurance cessions;”;
“(2) The provisions of subsection (1) shall not affect the right of Africa-Re, ZEP-RE or the reinsurance company incorporated under subsection (1) (c), to accept or decline all or any part of the minimum reinsurance cessions offered or placed by any insurer or reinsurer.”;
“(5) The reinsurance company incorporated in accordance with subsection (1) (c) shall have as its shareholders all the insurers licensed under this Act, except an insurer that does not wish to be a shareholder of the reinsurance company.
|
18 |
Act 13 Insurance (Amendment) Act 2011 Part VI—Amendments to Part VII of The Principal Act |
Section 71 of the principal Act, is amended—
“(d) the insurer is not able to meet its obligations to a policyholder under an insurance contract; or
Part VII—Insertion of Part VII A to The Principal Act
There is inserted immediately after Part VII of the principal Act, the following— “Part VII A—Compensation For Policyholders of Insolvent Insurer 71A. Policyholders' Compensation Fund
|
19 |
Act 13 Insurance (Amendment) Act 2011
Part VIII—Amendments to Part VIII of The Principal Act
section 78 of the principal Act, is amended by substituting for subsection (5) the following— “(5) A person aggrieved by a suspension of a licence under this section, may within thirty days from the receipt of the communication of the suspensions from the Authority, appeal to the Tribunal.”
Section 79 of the principal Act, is amended—
|
20 |
Act 13 Insurance (Amendment) Act 2011 “(1a) The deposit made under subsection (1) shall be considered part of the assets in respect of the capital, of the insurance broking company. (1b) The deposits made under subsection (1) shall be invested by the insurance broking company in Government securities or in any other investment as may be approved by the Authority, and on which the Authority shall have a lien. (1c) The security deposit made under subsection (1) shall be available to the insurance broking company in accordance with section 8. (1d) Any income that may accrue from the security deposit shall be payable to the insurance broking company that makes the security deposit.”
Section 80 of the principal Act, is amended—
“(2) An insurance agent shall not act for two or more insurers transacting the same class of insurance business.
21 |
Act 13 Insurance (Amendment) Act 2011
The principal Act is amended by inserting immediately after section
“82A. Auditing of accounts and auditors.
Section 83 of the principal Act is amended by inserting immediately after subsection (2) the following— “(3) A risk manager, loss assessor, loss adjuster, insurance surveyor and claim settling agent shall, in accordance with international financial reporting standards adopted by the Institute of Certified Public Accountants of Uganda, keep proper books of accounts for all the income and expenditure of the risk manager, loss assessor, loss adjuster, insurance surveyor or claim settling agent.”
The principal Act is amended by inserting immediately after section
“83A. Authority to inspect insurance brokers, loss assessors and loss adjusters
|
22 |
Act 13 Insurance (Amendment) Act 2011 |
Section 87 of the principal Act, is amended by inserting immediately after subsection (1) the following— “(1a) Where an insurance broker does not pay a premium collected, as required under subsection (1), the insurance broker shall within fourteen days after the expiry of the period specified for making the payment, submit to the insurer, the details of the client from whom the premium is collected. (1b) Where a premium continues to be outstanding sixty days after it is due, the policy shall be voidable at the instance of the insurer. (1c) The insurance broker shall be required to pay the premium which is due and interest on the premium, to the insurer and a penalty to the Authority, at rates to be determined by the Authority. |
23 |
Act 13 Insurance (Amendment) Act 2011 (1d) An insurance broker who does not pay to the insurer a premium collected on behalf of the insurer, commits an offence and shall on conviction be liable to a fine of not less than five hundred currency points.”
For section 89 of the principal Act, there is substituted the following— “89. Loans to insurance agents No insurance agent shall, without the prior approval of the Authority, have at any time, a loan outstanding to an insurance company, which is in the excess of an aggregate of one hundred currency points.” Part IX—Insertion of Part VIIIA to The Principal Act
The principal Act is amended by inserting a new Part VIIIA as follows— “Part VIIIA—The Insurance Appeals Tribunal 92A.Insurance Appeals Tribunal.
|
24 |
Act 13 Insurance (Amendment) Act 2011 92B. Tribunal to review decisions of the Authority.
92C. Decisions of the Tribunal
92D.Appeals to High Court from decisions of Tribunal A party to the proceedings before the Tribunal who is aggrieved by the decisions of the Tribunal, may within one month from the date of communication of the decision of the Tribunal, or within such further time as the High Court may allow, lodge a notice of appeal with the High Court. 92E.Expenses of the Tribunal The Authority shall bear the expenses for the administration of the Tribunal. 92F. Regulations under this Part
|
25 |
Act 13 Insurance (Amendment) Act 2011 Part X—Amendments to Part IX of The Principal Act |
For section 94 of the principal Act, there is substituted the following— “94. Insurance Institute of Uganda
The principal Act is amended by inserting immediately after section 94 the following— “94A.Insurance training levy
|
26 |
Act 13 Insurance (Amendment) Act 2011
Section 95 of the principal Act, is amended by substituting for “fifty thousand shillings” appearing in subsection (2), the words “fifteen currency points”.
The principal Act is amended by inserting immediately after section 96 the following— “96A. Protection from liability
Section 97 of the principal Act, is amended—
“(c) is privy to furnishing of any false information under this Act commits an offense and is liable on conviction to a fine of not less than one hundred and fifty currency points”;
“(b) a fine of not more than five hundred currency points;”;
“(b) a fine of not more than twenty five currency points;”. 27 |
Act 13 Insurance (Amendment) Act 2011
section 98 of the principal Act, is amended by inserting immediately after paragraph (g) the following— “(ga) relating to microinsurance; (gb) providing for the corporate governance of persons licensed under this Act; (gc) relating to health insurance organisations and health membership organisations; (gd) providing for inspections to be carried out under this Act; (ge) relating to the Policyholders’ Compensation Fund; (gf) relating to the use of the fines levied against the persons licenced under this Act; (gg) for prescribing for anything required by this Act to be prescribed;”. Part XII—Miscellaneous Amendments
There is inserted immediately after section 98, the following— “schedule 1 section 2 currency point A currency point is equivalent to twenty thousand shillings."
The Schedule to the principal Act is amended— |
28 |
Act 13 Insurance (Amendment) Act 2011
the words "every three months".
The principal Act is amended —
|
29 |