It may unintentionally cause some clients to stop consuming insurance since this country works primarily on credit terms
Ugandans must pay for their insurance policy, directly to the insurance company, before they receive cover as the Insurance Regulatory Authority (IRA) starts to enforce new regulations in the recently amended Insurance Act, 2017.
“Section 63 (1) of the Insurance Act, No.6 of 2017 (Act) requires all insurance policy holders to pay all the premiums payable under the insurance contract on or before the date of inception of the policy or renewal of the policy,” Alhaj Kaddunabbi Ibrahim Lubega, the IRA executive director said in a statement on Wednesday warning the public to deal with only licensed players.
The IRA has published a list of 21 non-life (general) insurance companies, nine life insurance companies, one re-insurance company, one micro insurance company, five health membership organization (HMO) companies, two re-insurance brokers, and 35 insurance brokers.
The published list shows that Uganda’s insurance industry is getting deeper with nine loss assessors, nine loss assessors and insurance surveyors, two loss adjustors, two loss adjustors and insurance surveyors, one loss assessor and insurance surveyor, one loss assessor, insurance surveyor and risk manager as well as 15 bancassurance agent banks.
Hitherto, many Ugandans were remitting their premiums to agents or brokers. In some cases, the agents and brokers were not remitting this money to the insurance companies in a timely manner something which affected the operations of the industry.
However, the biggest problem with receiving an insurance policy on credit is that clients and brokers have piled up large debts with insurance companies that may take years to settle in some cases.
Paul Kavuma, the Uganda Insurers Association chief executive officer said that although the changes will solve issues to do with premium collection and administration, it may unintentionally cause some clients to stop consuming insurance since this country works primarily on credit terms.
“The association is, therefore, engaging IRA to allow for flexible terms for certain business lines and big government or private sector projects,” Kavuma said.