African Re-insurance Corporation (Mandatory Re-insurance Cessions) Act

LAWS OF KENYA
THE AFRICAN RE-INSURANCE CORPORATION
(MANDATORY RE-INSURANCE CESSIONS) ACT
CAP. 487B
Revised and published by the National Council for Law Reporting
with the authority of the Attorney-General as gazetted by the Government Printer
www.kenyalaw.org

published by the National Council for Law Reporting
with the authority of the Attorney-General as gazetted by the Government Printer
www.kenyalaw.org

Kenya
African Re-insurance Corporation (Mandatory Re-insurance Cessions)
Act
Cap. 487B
Legislation as at 31 December 2022
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• NC: Only noncommercial uses of the work are permitted.
• SA: Adaptations must be shared under the same terms.
Share widely and freely.

African Re-insurance Corporation (Mandatory Re-insurance Cessions) Act (Cap. 487B)
Contents
1. Short title ........................................................................................................................................................................................................... 1
2. Interpretation .................................................................................................................................................................................................... 1
3. Mandatory re-insurance cessions to the Corporation ........................................................................................................................ 1
4. Re-insurance arrangements for local risks ............................................................................................................................................ 2
5. Right to accept or decline business offered ......................................................................................................................................... 2
6.

offered ......................................................................................................................................... 2
6.

Commissioner of Insurance to administer Act ..................................................................................................................................... 2
7. Offences and penalties .................................................................................................................................................................................. 2

.................................................................................................................................................... 2

African Re-insurance Corporation (Mandatory Re-insurance Cessions) Act (Cap. 487B) Kenya
AFRICAN RE-INSURANCE CORPORATION
(MANDATORY RE-INSURANCE CESSIONS) ACT
CAP. 487B
Published in Kenya Gazette Vol. XCVI—No.

sions) Act (Cap. 487B) Kenya
AFRICAN RE-INSURANCE CORPORATION
(MANDATORY RE-INSURANCE CESSIONS) ACT
CAP. 487B
Published in Kenya Gazette Vol. XCVI—No.

22 on 13 May 1994
Assented to on 8 May 1994
Commenced on 1 January 1978
[Revised by 24th Annual Supplement (Legal Notice 221 of 2023) on 31 December 2022]
An Act of Parliament to provide for mandatory re-insurance cessions to the African Re-insurance
Corporation and for matters related or incidental thereto
WHEREAS by the Agreement establishing the African Re-insurance Corporation (in this Act referred to as the
"Corporation") which came into force on 1st June, 1976, the Government of Kenya undertakes to guarantee that
all insurance and re-insurance establishments registered or authorized to carry on insurance business in Kenya
shall offer to place with the Corporation a minimum of five per cent of each of their re-insurance treaties, both
present and future including life treaties undertaken on terms accorded to most favoured re-insurers, and also to
ensure that national, local and foreign establishments engaged in direct insurance activities in Kenya conclude
separate re-insurance treaties for the local risks;
WHEREAS under the said Agreement the Corporation may accept or decline all or part of the business offered to
be placed with it;
AND WHEREAS it is expedient to make provisions giving legal effect to articles 27 and 28 of the said Agreement;
NOW, THEREFORE, BE IT ENACTED by the Parliament of Kenya as follows:-
1.

e provisions giving legal effect to articles 27 and 28 of the said Agreement;
NOW, THEREFORE, BE IT ENACTED by the Parliament of Kenya as follows:-
1.

Short title
This Act may be cited as the African Re-insurance Corporation (Mandatory Re-insurance Cessions) Act. 2. Interpretation
In this Act, unless the context otherwise requires—
"Agreement" means the Agreement establishing the African Re-insurance Corporation;
"Corporation" means the African Re-insurance Corporation established by the Agreement;
"Commissioner of Insurance" means the Commissioner of Insurance appointed under section 3 of the
Insurance Act (Cap. 487);
"insurance business" has the meaning assigned to it in section 2 of the Insurance Act;
"insurance and re-insurance institution" means any insurance and re-insurance institution registered or
authorized to carry on insurance business in Kenya. 3. Mandatory re-insurance cessions to the Corporation
(1) Any insurance or re-insurance institution shall, on or after the commencement of this Act, offer
to place with the Corporation a minimum of five per cent of each of their re-insurance cessions
both present and future, including life treaties undertaken on terms accorded to most favoured re-
insurers.

nt of each of their re-insurance cessions
both present and future, including life treaties undertaken on terms accorded to most favoured re-
insurers.

(2) The minimum re-insurance cessions prescribed by subsection (1) of this section are independent of
any mandatory cessions prescribed under section 145 of the Insurance Act (Cap. 487). 1

prescribed by subsection (1) of this section are independent of
any mandatory cessions prescribed under section 145 of the Insurance Act (Cap. 487). 1

African Re-insurance Corporation (Mandatory Re-insurance Cessions) Act (Cap. 487B) Kenya
(3) Subject to any amendment to article 27 of the Agreement in respect of the minimum re-insurance
cessions, the Cabinet Secretary for the time being responsible for Insurance may by Order published
in the Gazette vary the minimum re-insurance cessions specified in subsection (1) of this section. 4. Re-insurance arrangements for local risks
(1) Where local insurance business is covered by global re-insurance treaties established outside Africa
every national, foreign or local establishment engaged in direct insurance activities in Kenya shall,
on or after the commencement of this Act, conclude separate re-insurance treaties for the local
risks. (2) Nothing in subsection (1) shall prevent any insurance institution from entering into a direct re-
insurance treaty with the Corporation in respect of the whole or part of the risks undertaken
by such institution or from making such other arrangements as are mutually acceptable to the
Corporation and such institution. 5.

the risks undertaken
by such institution or from making such other arrangements as are mutually acceptable to the
Corporation and such institution. 5.

Right to accept or decline business offered
(1) The Corporation may accept or decline all or part of the re-insurance cessions offered to be placed
with it under this Act; and in that case the Corporation shall furnish the insurance or re-insurance
institution concerned, as the case may be, if so required, with the reasons for its refusal. (2) Where re-insurance cessions are refused under subsection (1) of this section any liability of the
insurance or re-insurance institution shall cease. 6. Commissioner of Insurance to administer Act
(1) The Commissioner of Insurance shall administer this Act. (2) The Commissioner may in the discharge of his functions under subsection (1) of this section issue
such directions as he deems necessary or expedient for carrying out the purposes of this Act. 7. Offences and penalties
(1) Any person who fails—
(a) to comply with section 3; or
(b) to comply with any directions issued by the Commissioner of Insurance under section 6,
shall be guilty of an offence and liable to a fine not exceeding fifty thousand shillings, and if the
offence continues, to a further fine of two thousand shillings for every day during which the offence
continues.

fifty thousand shillings, and if the
offence continues, to a further fine of two thousand shillings for every day during which the offence
continues.

(2) Where a person guilty of an offence under subsection (1) of this section is a natural person that
person shall be liable in addition to, or in lieu of, a fine, to imprisonment for a term not exceeding
three years. (3) Where a person guilty of an offence under subsection (1) of this section is a body corporate, then
notwithstanding the imposition of any penalty under this section, the commission of that offence
shall constitute sufficient grounds whereby the Commissioner may apply to the court for winding-
up of that body corporate, if such body is incorporated in Kenya. 2