Well, I recently
read an article in one of the mainstream dailies that the Association of
Insurance Brokers of Kenya (AIBK) has moved to court to challenge the law that
stipulates penalties on insurance fraud. The association has sued the National
Treasury Cabinet Secretary, the Attorney-General and the Insurance Regulatory
Authority while seeking to stop the implementation of the Insurance (Amendment)
law.
Reason:
According to the details
of the suit, amendments to the bill did not balance the rights of all industry
players frustrate government policy of growing insurance penetration and
criminalises handling of premiums by insurance brokers. Through their lawyer
Paul Muite, they say the bill that was assented to on July 5 also seeks to bar
brokers from collecting premiums.
“The implementation
of the contentious law will have far-reaching implications that will result in
wiping out the business on insurance brokerage in Kenya as well as jeopardise
livelihoods,” said Mr Muite.
The contentious bill;
MPs passed the bill
following lobbying and apparent kickbacks by insurance firms on reports that
brokers delay remitting of premiums and that their agents engage in fraud.
Insurance firms now
see brokers for who they are, an unnecessary middleman!
Protect this crime, please! Damn!
But now the brokers
are seeking court protection, saying the new law puts them at risk of being
arrested and prosecuted following its gazettement on July 19.
What is the crime?
Usually, brokers
and agents act as intermediaries between policyholders and the insurance
companies, advising buyers on products, policies available, and collect
premiums.
From the suit
details, the AIBK alleged that the sector will be plunged into a crisis leading
to the loss of business and revenue among its members.
It also alleged
that at least 5,000 individuals whose livelihood as well as families depend on
them will be affected. The group has termed the disputed law as punitive and
discriminatory against the petitioners’ members.
Sickening;
To that point, I
sit up straight and sigh! It’s sickening that AIBK is fighting to undo a bill
meant to put a check on crime. For the bill to be drafted, Insurers had
suffered enough at the hands of these brokers.
Let’s take a look at the suffering;
·
Consumers of insurance products end up paying much more premiums
to this middleman to cater for brokerage and transaction fees – unnecessarily
putting more pressure on their pockets and or businesses.
·
The middleman still charges the insurance company for acting as
agents – thus reducing the revenue portfolio for the insurance company.
·
As if the above is not enough, brokers still hoard these
premiums and delay remittances to the insurance companies thus chocking the
insurers further.
·
Various frauds reported in the recent past have been
orchestrated by staffs of these brokers using insider information and
expertise. This, insurers say contributes to more than 15% of claims lodged –
FRAUD!
My English teacher
back then, one Madam Makhanu, taught me that it is always fine, no matter what
society will think of one, to call a spade a spade! I will this one out without
fear of contradiction, insurance brokers are an unnecessary middleman in the
insurance industry – PERIOD!
The suit is therefore utter gimmick and a complete mockery of the
court process and the suit should be thrown out with costs to the complainant!
