Laws of Kenya ActiveThe Insurance (Claims Management) Guidelines, 2022
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LAWS OF KENYA THE INSURANCE (CLAIMS MANAGEMENT) GUIDELINES, 2022 NO. 3638 OF 2022 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 Insurance Act The Insurance (Claims Management) Guidelines, 2022 Gazette Notice 3638 of 2022 Legislation as at 29 March 2022 By Kenya Law and Laws.Africa. Share widely and freely. www.kenyalaw.org | [email protected] FRBR URI: /akn/ke/act/gn/2022/3638/eng@2022-03-29 There is no copyright on the legislative content of this document. This PDF copy is licensed under a Creative Commons Attribution NonCommercial ShareAlike 4.0 License (CC BY-NC- SA 4.0). This license enables reusers to distribute, remix, adapt, and build upon the material in any medium or format for noncommercial purposes only, and only so long as attribution is given to the creator. If you remix, adapt, or build upon the material, you must license the modified material under identical terms. CC BY-NC-SA includes the following elements: • BY: credit must be given to the creator. • NC: Only noncommercial uses of the work are permitted. • SA: Adaptations must be shared under the same terms. Share widely and freely. the creator. • NC: Only noncommercial uses of the work are permitted. • SA: Adaptations must be shared under the same terms. Share widely and freely. The Insurance (Claims Management) Guidelines, 2022 (Gazette Notice 3638 of 2022) Contents STATEMENT OF INTENT .................................................................................................................................................................................... 1 1. Citation ................................................................................................................................................................................................................ 1 2. Interpratation .................................................................................................................................................................................................... 1 3. Application ......................................................................................................................................................................................................... 1 4. Purpose ................................................................................................................................................................................................................ 1 5. ................................................................................................................................................. 1 5. General Requirements ................................................................................................................................................................................... 1 6. Pre–Loss Information .................................................................................................................................................................................... 1 7. Valuation of Motor Vehicles ........................................................................................................................................................................ 2 8. Repair of Motor Vehicles .............................................................................................................................................................................. 2 9. Contribution Towards Repairs ..................................................................................................................................................................... 2 10. ................................................................................................................................................ 2 10. Claim of Notification ................................................................................................................................................................................... 2 11. Acknowledgement of Claim Notification ............................................................................................................................................. 3 12. Receipt of Claims by the Company ........................................................................................................................................................ 3 13. Decline of Claim ........................................................................................................................................................................................... 3 14. Procedure Manual ......................................................................................................................................................................................... 4 15. ................................................................................................................................................ 4 15. Insurance Fraud ............................................................................................................................................................................................. 4 16. Salvage Disposable ...................................................................................................................................................................................... 4 17. Customer Service ........................................................................................................................................................................................... 4 18. Enforcement .................................................................................................................................................................................................... 4 .................................................................................................................................................... 4 The Insurance (Claims Management) Guidelines, 2022 (Gazette Notice 3638 of 2022) Kenya INSURANCE ACT THE INSURANCE (CLAIMS MANAGEMENT) GUIDELINES, 2022 GAZETTE NOTICE 3638 OF 2022 Published in Kenya Gazette Vol. CXXIV—No. 56 on 29 March 2022 Commenced on 29 March 2022 STATEMENT OF INTENT THE Insurance (Claims Management) Guidelines are made by the Insurance Regulatory Authority pursuant to section 3A(1)(g) of the Insurance Act and are intended to provide principles of management of insurance claims by an insurer as well as the market conduct relating to the claims process and to ensure prompt payment of claims and to promote consumer confidence in the insurance industry. 1. Citation These Guidelines may be cited as the Insurance (Claims Management) Guidelines, 2022. 2. ote consumer confidence in the insurance industry. 1. Citation These Guidelines may be cited as the Insurance (Claims Management) Guidelines, 2022. 2. Interpratation In these Guidelines, unless the context otherwise requires— "claim" means a request by a claimant to an insurance company for compensation based on the terms of the insurance policy and includes claims related expenses; "claimant" means a person who has a right to a settlement arising from a contract of insurance; "insurer" means a person, registered under the Act, who carries on insurance business; and "service provider" refers to Risk Managers, Motor Assessors, Insurance Investigators, Loss Adjustors, Insurance Surveyors and Claim Settling Agents registered under the Act. 3. Application These Guidelines shall apply to all insurers, intermediaries and the service providers. 4. Purpose The purpose of these Guidelines is— (a) to ensure prompt payment of claims; and (b) to promote consumer confidence in the insurance industry. 5. General Requirements The board of an insurer shall develop, document and implement policies and procedures for effective claims management. 6. Pre–Loss Information (1) An insurer shall, at the time of issuing an insurance policy, provide in writing the procedures to be followed by a claimant when lodging a claim. 1 ) An insurer shall, at the time of issuing an insurance policy, provide in writing the procedures to be followed by a claimant when lodging a claim. 1 The Insurance (Claims Management) Guidelines, 2022 (Gazette Notice 3638 of 2022) Kenya (2) An insurer shall not ask for information that ought to have been provided at the time of policy issuance. (3) An insurer shall explain to the policyholder the claim conditions such as depreciation, average, pre- loss value, reinstatement, excess or deductibles among others. (4) An insurer shall ensure that the claims procedure provided to the claimant contains information on — (a) loss minimization; (b) claims notification as provided under the terms of the policy; and (c) the need for claimant to cooperate with the insurer and other service providers in the processing of the claim. 7. Valuation of Motor Vehicles An insurer shall ensure that valuation of motor vehicles shall be carried out at inception or subsequent renewal of cover and the valuation shall form the basis of settlement of any claim. 8. motor vehicles shall be carried out at inception or subsequent renewal of cover and the valuation shall form the basis of settlement of any claim. 8. Repair of Motor Vehicles (1) Accident vehicles shall be repaired by a repairer of the insured choice selected from the insurer’s panel of repairers, provided that where the insured chooses one outside the panel, the insurer shall ascertain that the repairer is competent to carry out such repairs and has complied with all statutory requirements to carry out such business. (2) A copy of the assessment report containing a list of parts to be repaired and replaced shall be made available to the claimant. 9. Contribution Towards Repairs An insured shall only be called upon to contribute towards repairs where— (a) components in the vehicle are subject to continuous wear and tear and such components shall include— (i) tyres and tubes; (ii) batteries; (iii) engine overhaul parts; and (iv) gear box, transmission and transfer cases. (b) the vehicle requires rebranding after repairs; and (c) the repair requires a set of similar items to be replaced whilst only one of the items was damaged in the accident. 10. Claim of Notification (1) Notification of the claim shall be done as per the insurance policy terms and conditions. s was damaged in the accident. 10. Claim of Notification (1) Notification of the claim shall be done as per the insurance policy terms and conditions. (2) Where a claim notification is received by an insurance intermediary, such notification shall immediately be transmitted to the insurer not later than two (2) working days. (3) Any claims notified through an intermediary shall be deemed to have been notified to the insurer. 2 e insurer not later than two (2) working days. (3) Any claims notified through an intermediary shall be deemed to have been notified to the insurer. 2 The Insurance (Claims Management) Guidelines, 2022 (Gazette Notice 3638 of 2022) Kenya 11. Acknowledgement of Claim Notification An insurer shall take the following action immediately but not later than two (2) working days, upon receipt of claim notification— (a) acknowledge the notification; (b) avail an appropriate claim form and if specific documents are required for processing the claim, the insurer shall provide a list of all the documents; (c) provide any additional information or advice that will assist in dealing with the claim; and (d) appoint a service provider(s) as necessary 12. s; (c) provide any additional information or advice that will assist in dealing with the claim; and (d) appoint a service provider(s) as necessary 12. Receipt of Claims by the Company (1) An insurer shall upon receipt of all the documents from the claimant— (a) acknowledge receipt of the documents within two (2) working days; (b) if a claim is admissible and can be settled immediately without any further assessment, effect the settlement of the claim; (c) if the claim is admissible but further assessment by a service provider is necessary to quantify the loss, appoint a service provider and advise the claimant on the action being taken and the insurer shall, upon receipt of the assessment report, make an offer to settle the claim; (d) where further investigation is necessary to determine admissibility of the loss under the policy, notify the claimant of this requirement; and (e) and within seven (7) calendar days of receipt of the investigation report, make an offer or communicate declinature and the reasons thereof. (2) An admission of liability as contemplated under the Act shall be construed to mean performance of an act by an insurer that is consistent with the settlement of the claim and shall include but not limited to making of an offer, issue of a discharge voucher, authorizing repair and replacements. he settlement of the claim and shall include but not limited to making of an offer, issue of a discharge voucher, authorizing repair and replacements. (3) If in the opinion of the insurer the loss is not covered by the insurance policy, the insurer shall after exhausting their internal mechanisms on declining a claim, immediately send a notification to the claimant explaining the reasons for declining the claim; and (4) If the amount offered is different from the amount claimed, the insurer shall explain the reason for this to the claimant and avail to the claimant the assessment report. (5) Where the insurer declines part of a claim, the insurer shall promptly notify the claimant of this fact and explain the reasons. (6) An insurer shall not repudiate a claim on the basis of late notification without establishing the reasons thereof. 13. Decline of Claim An insurer shall not decline a claim on the grounds of— (a) non-disclosure of material facts which a policyholder will not reasonably be expected to have known; (b) pre-existing or congenital medical conditions which had not been previously diagnosed; (c) misrepresentation unless it is fraudulent or negligent misrepresentation of material facts; 3 conditions which had not been previously diagnosed; (c) misrepresentation unless it is fraudulent or negligent misrepresentation of material facts; 3 The Insurance (Claims Management) Guidelines, 2022 (Gazette Notice 3638 of 2022) Kenya (d) breach of warranty or condition where the circumstances of the loss are unconnected with the breach; (e) late reporting without establishing and considering the reasons for the late notification; (f) a breach of policy conditions where the policyholder was not issued with the policy document at inception of the policy; (g) non-payment of premium to an insurer where cover has not been cancelled or where cancellation has been done through an intermediary and not communicated to the policyholder; and (h) expiry of a driving license at the time of the accident provided that the driver was not disqualified from holding such a license at the time of the accident. 14. Procedure Manual (1) Every insurer shall develop and maintain a manual on their claims handling procedures which shall include all steps from claim intimation to settlement for different classes of insurance business. (2) The manual shall provide expected timeframes in each of the steps, provided that the insurer shall, while setting the time frames take into consideration the provisions of the Act. ted timeframes in each of the steps, provided that the insurer shall, while setting the time frames take into consideration the provisions of the Act. (3) An insurer, while formulating the manual, shall put in place clearly defined controls and reporting systems surrounding the claims management process. (4) An insurer shall update the claimant on status of the claim in a timely and fair manner. 15. Insurance Fraud (1) An insurer shall take the following steps to eradicate fraudulent claims— (a) establish systems and controls for detecting and prevention of fraudulent claims; and (b) discourage fraudulent practices by informing the claimant of the consequences of submitting false statements. (2) An insurer shall report fraudulent claims to the Authority and maintain a database of the same. 16. Salvage Disposable An insurer shall not dispose of salvage before the insured is indemnified. 17. Customer Service (1) An insurer shall establish a well-resourced customer service function, depending on the nature, scale and complexity of the insurer’s operations, to address queries and complaints related to claims. (2) An insurer shall have a documented procedure and timelines for receiving, registering and resolving complaints and the same be replicated in each of its offices. 18. l have a documented procedure and timelines for receiving, registering and resolving complaints and the same be replicated in each of its offices. 18. Enforcement Where the Authority determines non-compliance with the provisions of these Guidelines, it may take any intervention prescribed in the Act including— (a) directing the insurer, intermediary or the service provider to take appropriate remedial action; (b) imposing additional reporting requirements and monitoring activities; (c) withdrawing or imposing conditions on the business license taking into account the nature of the breach; 4 The Insurance (Claims Management) Guidelines, 2022 (Gazette Notice 3638 of 2022) Kenya (d) imposing monetary penalties as provided for under the Act; or (e) taking any other action as may be deemed necessary. 5
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