The Insurance Regulatory Authority (IRA) has encouraged insurers to cover losses arising from terrorism attacks.
The IRA Corporation Secretary/Legal Affairs Manager Ms. Nkirote Mworia said that terror attacks are a reality that insurance firms should adopt on policies.
“The reality of terrorism cover came to the fore after the recent Westgate Mall attack that led to loss of lives and property running into billions of shillings,” Ms. Mworia said.
Ms. Mworia said that insurers should openly disclose full policies to clients arguing that majority of policy holders with property investments are unaware that their covers do not include terrorism acts.
The IRA Corporation Secretary was speaking during a Law Society of Kenya (LSK) Continuing Legal Education (CLE) Seminar on Insurance Law at the College of Insurance in South C, Nairobi.
Ms. Mworia presented a paper titled The Future of Insurance Regulation: Insurance Core Principles at the one day seminar under the theme Unpacking Insurance Law: Regulation & Practice.
Ms. Mworia said that insurers should also inform policy holders whether they would be required to pay extra premium to be covered against terrorism acts.
“It would be proper if insurers also embrace policies that would see clients benefit from ex gratia payments following losses out of terror attacks,” Ms. Mworia said.
The IRA Corporation Secretary proposed that policy holders who want to insure against terror may also be requested to subscribe to additional covers.
The Insurance penetration in Kenya stands at 3.2 per cent of the country’s Gross Domestic Product (GDP), largely attributed to services associated with the middle and upper class.
Ms. Mworia was responding to a question by former Speaker of the National Assembly Mr. Kenneth Marende on why many insurance companies do not issue covers against terrorism.
“Terrorism is a reality and insurance companies must start issuing covers to protect unfortunate victims,” Mr. Marende said.
Mr. Marende said that IRA should ensure that insurers disclose exclusions to policy holders in line with consumer protection as envisaged in Article 46 of the Constitution.
SOURCES