, NAIROBI, Kenya, Apr 15 – The Competition Authority of Kenya (CAK) has penalised the Association of Kenya Reinsurers (AKR) a total of Sh721, 715 for engaging in price fixing and unfair trade practice.
CAK carried out investigation following a complaint lodged by the National Intelligence Service (NIS) where AKR had advised its members on the minimum applicable premiums on the renewal of NIS Group Life Scheme for 2013/2014 Financial Year.
CAK Director General Wangombe Kariuki says the setting of the premium rate by the Association and the request to all the insurance companies tendering for Group life cover for the period 2013/2014 to charge the fixed rate amounts to collusion and is in violation of the Competition Act.
CAK further compelled the Association to give a written undertaking to desist any future conduct that contravenes the provisions of the Act.
Kariuki says insurance companies are required to use an independent actuary to come up with their own individual premium rates which they file with the IRA for approval.
The members of AKR include Kenya Reinsurance Corporation Limited, African Reinsurance Corporation, East Africa Reinsurance Company, Zep-Re (PTA Reinsurance Company), and Continental Reinsurance Limited Kenya.
“CAK will continue to focus its enforcement activities in this sector to ensure both business and individual consumers get products/services at rates dictated only by forces of supply and demand,” Kariuki said.
He said CAK and the Insurance Regulatory Authority (IRA) have commenced discussions aimed at actualizing an interaction framework which will, among others, facilitate sharing of information; market data and coordinating competition deepening activities within the insurance sector.
The regulator has planned to roll-out a Special Compliance Programme targeting all trade associations in Kenya in a bid to accord the associations a window, within set timelines, to review their operational frameworks and align them with the provisions of the Competition Act.