This Act may be cited as the Preferential Trade Area Re-insurance Company (Mandatory Re-insurance Cessions) Act, 1993.
In this Act, unless the context otherwise requires—
means the Agreement establishing the Preferential Trade Area Re-insurance Company;
means the Preferential Trade Area Re-insurance Company established by article 2 of the Agreement;
means the Commissioner of Insurance appointed under section 3 of the Insurance Act (Cap. 487);
has the meaning assigned to it in section 2 of the Insurance Act;
means any insurance and re- insurance institution of any kind, public or private, registered or authorized to carry on insurance business in Kenya, and includes national insurance and re- insurance institutions;
means the Minister for the time being responsible for insurance;
means the Eastern and Southern African sub-region.
Any insurance or re-insurance institution shall, on or after the commencement of this Act, offer to place with the Company a minimum of ten per cent of each of its re-insurance cessions, both present and future, placed in the international insurance market.
Subsection (1) shall not restrict the right of the Company to accept re- insurance cessions in life or any other type of insurance business.
The minimum re-insurance cessions prescribed in subsection (1) of this section are independent of any mandatory cessions prescribed under section 145 of the Insurance Act (Cap. 487).
Subject to any amendment to article 20 of the Agreement in respect of, the minimum re-insurance cessions, the Minister may by order published in the Gazette vary the minimum re-insurance cessions specified in subsection (1) of this section.
Where local insurance business is covered by global re-insurance arrangements outside the sub-region, every national, local or foreign establishment engaged in insurance and re-insurance activities in Kenya shall, on or after the commencement of this Act, conclude separate re-insurance arrangements for the local risks.
Nothing in subsection (1) shall prevent any insurance or re-insurance institution from entering into direct re-insurance arrangements with the company 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 Company and such institution.
Where the Company deems it necessary or prudent, the Company shall exercise the right to accept or decline all or part of the business offered to be placed with it under this Act, and in that case the Company shall furnish the insurance or re-insurance institution concerned, as the case may be, if so requested, with the reasons for its refusal.
The ceding insurance or re-insurance institution may appeal against the refusal to the Board of Directors of the Company in accordance with article 21 of the Agreement.
Where re-insurance cessions are refused under this section any liability of the insurance or re-insurance institution concerned under this Act in respect of such reinsurance cessions shall cease.
The Commissioner of Insurance shall administer this Act.
The Commissioner of Insurance may, in the discharge of his functions under subsection (1), with the prior approval of the Minister issue such directions as he deems necessary or expedient for carrying out the purposes of this Act.
A person aggrieved by any direction issued by the Commissioner under subsection (2) may, within thirty days from the date the direction is issued to him, appeal against such direction to the Tribunal established under section 169 of the Insurance Act (Cap. 487), and the Tribunal may, subject to such terms and conditions as it may consider necessary, confirm, reverse, cancel or vary any such direction.
Any person who fails—
to comply with section 3; or
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.
Where a person guilty of an offence under subsection (1) 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.
Where a person guilty of an offence under subsection (1) of this section is a body corporate, then notwithstanding the imposition of any penalty, the commission of that offence shall constitute sufficient grounds whereby the Commissioner may apply to the court for the winding-up of that body corporate, if such body is incorporated in Kenya.