The Bill seeks to, amongst others, import all provisions relating to the insurance industry from the Non-Banking Financial Institutions Regulatory Act. Currently, the insurance industry is regulated under the Insurance Industry Act of 1987.
The house’s nod for the Bill provides for the licensing, governance and regulation of all insurers, insurance brokers, insurance agents and representatives operating in Botswana and for matters incidental to or connected therewith.
The passage of the Bill by Parliament will also clear the air of inadequacies and provide clarity and transparency in the regulatory process.
The enactment of the Bill will also address general concerns usually raised by consumers alleging that insurance companies rip them off.
Earlier on, during the second reading of the Bill, the Minister of Finance and Development Planning Kenneth Matambo had said the Insurance Industry Act of 1987 has been surpassed by developments in the insurance landscape.
Matambo noted that its provisions are now inadequate and added that there are several supervisory gaps and that it is irrelevant in today’s business environment and it is inflexible.
The Bill, which has ten parts and 116 clauses, will provide for all the detailed processes and duties relating to the insurance industry, and by importing all provisions relating to the insurance industry from the Non-Banking Financial Institutions Regulatory Act in order to provide for all the provisions of insurance industry under one Act. It also seeks to provide for the licensing provisions for insurers, insurance brokers and insurance agents, as well as increase penalties.
The second part deals with the licensing provisions for insurers, while the third and forth part deal with the manner of carrying on insurance business and the financial soundness of such business respectively.
Part V provides for the amalgamation and transfer of insurance businesses while the sixth part provides for the statutory management of and winding up of insurance businesses, protection of policyholders and creditors in that event. As for Part VII, the Bill provides for the business practices of insurance businesses and lays out the protection on the policy and policyholders.
Part VIII deals with provisions for insurance brokers, insurance agents representatives, including provisions relating to licensing and lays out the services rendered by the insurance brokers, insurance agents and representatives.
Part IX provides for business conducted by an association of underwriters.
