The Insurance Regulatory Authority (IRA) has asked Insurers to offer a 3 month grace period for the payment and renewal of premium Insurance for policyholders suffering financial drawback due to the COVID-19 pandemic.
“Insurers should avail policy holders a three-month grace period. The grace period may be over and above any contractual premium holidays already in place for existing policies,” IRA chief executive Godfrey Kiptum stated.
Some isurers are, however, reluctant to enact these directives citing that such a grace period will be difficult to offer payouts for claims the general insurance market as there will be no premiums paid.
The insurers argue that Kenya’s general insurance which includes motor, medical, fire, aviation, etc will be heavily affected as the Insurance business is “cash and carry”
Life insurance Kenyans will benefit the most from this directive, their policy contracts contain specific commencement dates and maturities and under normal circumstances, clients would have to pay regardless, failure to pay would immediately mean they lose the policy in the first three years and get refunded a small surrender value.
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