INSURANCE ACT, 2006 ACT 724

INSURANCE ACT, 2006 ACT 724

DATE OF PRESIDENTIAL ASSENT: 29th December, 2006.

DATE OF GAZETTE NOTIFICATION: 29th December, 2006.

AN ACT to revise the law relating to insurance in order to provide comprehensive provisions for the regulation of the insurance industry and for related matters.

National Insurance Commission
1. Establishment of the National Insurance Commission

(1) There is established by this Act, the National Insurance Commission.

(2) The Commission is a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.

(3) The Commission may for the performance of its functions acquire any movable and immovable property and may enter into any contract or other transaction.

2. Object and functions of the Commission

(1) The object of the Commission is to ensure effective administration, supervision, regulation, monitoring and control of the business of insurance to protect insurance policy holders and the insurance industry other than health insurance under the National Health Insurance Act, 2003 (Act 650).

(2) For the attainment of its object under subsection (1) the Commission shall perform the following functions:

(a) license insurers and insurance intermediaries who transact insurance business in Ghana;

(b) in consultation with relevant bodies approve and set standards for the conduct of insurance business and insurance intermediary business;

(c) encourage the development of and compliance with the insurance industry’s codes of conduct;

(d) approve, where appropriate, the rate of insurance premiums and commissions in respect of any class of insurance;

(e) provide a bureau to which complaints may be submitted by members of the public for resolution;

(f) arbitrate insurance claims referred to the Commission by any party to an insurance contract;

(g) recommend to the Minister proposals for the formulation of policies for the promotion of a sound and efficient insurance market in the country;

(h) supervise and approve transactions between insurers and their re-insurers;

(i) undertake sustained and methodical public education on insurance;

(j) take action against any person carrying on insurance business or the business of insurance intermediaries without a licence;

(k) maintain contact and develop relations with foreign insurance regulators and international associations of insurance supervisors and maintain a general review of internationally accepted standards for the supervision of insurers and insurance intermediaries;

(l) supervise, regulate and control compliance with the provisions of this Act and Regulations made under it and any other enactment relating to insurance; and

(m) perform other functions that are incidental to the carrying out of its functions under this Act.

(3) In performing its functions under this Act the Commission shall have regard to the protection of the public against financial loss arising out of the dishonesty, incompetence, malpractice or insolvency of insurers or insurance intermediaries.

3. Governing body of the Commission

(1) The governing body of the Commission is a Board consisting of

(a) the chairperson;

(b) one representative of the Ministry of Finance and Economic Planning not below the rank of Principal Economic Officer;

(c) one person who is either an experienced chartered insurer or a qualified insurance practitioner nominated in consultation with the insurance industry bodies;

(d) one person with qualification and practice in finance;

(e) one practising lawyer nominated by the Ghana Bar Association;

(f) the Commissioner of Insurance appointed under section 12 (1); and

(g) one other person nominated by the President.

(2) The members of the Board shall be appointed by the President in accordance with article 70 of the Constitution.

4. Responsibility of the Board

The Board shall monitor and oversee the operations of the Commission and ensure the effective implementation of the object and functions of the Commission.

5. Tenure of office of members

(1) A member of the Board shall hold office for a period not exceeding three years and is eligible for re-appointment but a member, except the Commissioner, shall not be appointed for more than two terms in succession.

(2) Where a member of the Board resigns, dies, is removed from office or is for a sufficient reason unable to act as a member, the Minister shall notify the President of the vacancy and the President shall, acting on the advice of the nominating authority, and in consultation with the Council of State appoint another person to hold office for the unexpired portion of the member’s term of office.

(3) A member of the Board may at any time resign from office in writing addressed to the President through the Minister.

(4) A member of the Board who is absent from three consecutive meetings of the Board without sufficient cause, ceases to be a member of the Board.

(5) The President may revoke the appointment of a member by a letter addressed to that member.

6. Meetings of the Board

(1) The Board shall meet at least once every three months for the dispatch of business at times and in places determined by the chairperson.

(2) A special meeting of the Board shall be convened by the chairperson at the request of not less than one-third of the members of the Board.

(3) The quorum at a meeting of the Board is five members.

(4) The chairperson shall preside at meetings of the Board and in the absence of the chairperson, a member of the Board elected by the members present.

(5) Matters before the Board shall be decided by the majority of the members present and voting and in the event of equality of votes, the person presiding shall have a casting vote.

(6) The Board may co-opt a person to attend a Board meeting but that person shall not vote on the matter for decision at the meeting.

(7) The proceedings of the Board shall not be invalidated by reason of a vacancy among the members or a defect in the appointment or qualification of a member.

(8) Subject to this section, the Board shall determine the procedure for its meetings.

7. Disclosure of interest

(1) Board shall disclose in writing the nature of that interest and is disqualified from participating in the deliberations of the Board in respect of that matter.

(2) A member who contravenes subsection (1) ceases to be a member.

8. Establishment of committees

(1) The Board may establish committees consisting of members of the Board or non-members or both to perform a function.

(2) A committee of the Board may be chaired by a member of the Board.

 

  • The Board shall determine the functions of a committee it appoints.
9. Allowances for members of the Board

Members of the Board and members of a committee of the Board shall be paid the allowances determined by the Board with the approval of the Minister.

10. Engagement of consultants and experts

The Board may engage the service of a consultant or other expert on terms and conditions determined by the Board.

11. Ministerial directions

The Minister may give directives to the Board on matters of policy for the Commission in the performance of its functions.

12. Appointment of Commissioner and Deputy Commissioner of Insurance and their functions

(1) The President shall in accordance with article 195 of the Constitution appoint a Commissioner of Insurance.

(2) The Commissioner shall be the chief executive of the Commission and shall be a person who has the qualification and experience in the insurance industry.

(3) The Commissioner shall, subject to the general directions of the Board be responsible for the day to day administration of the Commission.

(4) The Commissioner may in an emergency situation or for the protection of public interest, take enforcement action or other action and within fourteen days after the date of the action taken, inform the Board in writing for the Board’s review of the action taken.

(5) The Commissioner may delegate the functions of office to an officer of the Commission but shall not be relieved from ultimate responsibility for the performance of the delegated function.

(6) The President shall in accordance with article 195 of the Constitution appoint a Deputy Commissioner of Insurance.

(7) The Deputy Commissioner shall perform functions as the Board or the Commissioner shall direct.

(8) The terms and conditions of the Commissioner and the Deputy Commissioner shall be specified in their letters of appointment.

13. Secretary to the Board

(1) The Commission shall have an officer to be designated as Secretary to the Board.

(2) The Secretary shall perform functions assigned by the Commissioner and the Board.

14. Appointment of other staff

(1) The President shall in accordance with article 195 of the Constitution appoint other staff of the Commission that are necessary for the proper and effective performance of its functions.

(2) Other public officers may be transferred or seconded to the Commission or may otherwise give assistance to it.

(3) The Commission may engage the services of advisers on the recommendation of the Board.

15. Delegation of appointment

The President may in accordance with article 195 (2) of the Constitution delegate the power of appointment of public officers under this Act.

16. Budget and work programme

(1) The Commissioner shall not later than three months before the commencement of each financial year prepare in respect of that financial year

(a) estimates of the Commission’s

(i) expected expenditure, and

(ii) expected income, and

(b) a work programme containing a general description of the work and activities that the Commission plans to undertake.

(2) The estimated expenditure of the Commission shall include an amount for the reserves of the Commission.

(3) The Commissioner shall submit to the Board a copy of the estimates and work programme not less than two months prior to the commencement of the financial year.

(4) The Board shall consider the estimates and work programme and shall not later than one month before the commencement of the financial year, approve a budget and work programme for the Commission.

17. Levies payable to Commission

(1) A person who holds an insurance licence or an insurance intermediary’s licence during a financial year, shall pay a levy towards the expenses of the Commission in that financial year calculated by the Commission in consultation with the licensees.

(2) The total amount of levies imposed on licensees by the Commission under this section in a particular year shall not fall below the income of the Commission from levies during the preceding year with an increase to accommodate the rate of inflation in that particular year.

(3) The rate of inflation in subsection (2) shall be the official rate of inflation.

(4) The Commission shall provide in writing

(a) the formula for calculating the levy,

(b) the time and method of payment, including instalment payments,

(c) the payment of interest on moneys over-due, and

(d) penalties for non-payment.

18. Funds of the Commission

The sources of money for the performance of the functions of the Commission include

(a) levies payable to the Commission under section 17,

(b) grants from Government and from any other source approved by the Minister,

(c) loans contracted or guaranteed by Government, and

(d) donations,

(e) fees and other charges payable by insurance companies and intermediaries,

(f) fines imposed by a Court for breach of this Act and Regulations,

(g) motor contributions prescribed by Regulations, and

(h) any other income approved by the Board.

19. Accounts and audit

(1) The Commission shall keep books of account and proper records in relation to them in a form approved by the Auditor-General.

(2) The accounts of the Commission shall be audited by the Auditor-General or an auditor appointed by the Auditor-General within three months after the end of each financial year.

(3) The Auditor-General shall, not later than three months after the end of each financial year, forward a copy of the audited accounts of the Commission for the preceding financial year to the Minister.

(4) The financial year of the Commission shall be the same as the financial year of the Government.

20. Annual report and other reports

(1) The Commission shall as soon as practicable after the end of each financial year but within eight months after the end of the financial year submit an annual report to the Minister covering the activities and the operations of the Commission for the year to which the report relates.

(2) The annual report shall include the report of the Auditor-General.

(3) The Minister shall within two months after the receipt of the annual report submit the report to Parliament with a statement that the Minister may consider necessary.

(4) The Commission shall also submit to the Minister other reports that the Minister may require in writing.

Licensing of Insurers
21. Application for insurer’s licence

(1) A company incorporated in the country as a limited liability company may apply to the Commission for a licence to carry on insurance business.

(2) An application under subsection (1) shall be in writing and shall

(a) state the class of insurance business for which the applicant seeks authorisation to carry on business,

(b) contain the prescribed information and be in the prescribed form, and

(c) be accompanied with the prescribed documentation.

(3) The Commission shall require an applicant to furnish it with

(a) a business plan covering among others, the

i. class of insurance business to be undertaken,

ii. company’s re-insurance programme,

iii. estimated setting up costs and how the cost will be financed, and

iv. projected development of business shown by projected revenue account and the balance sheet,

(b) contract documents,

i. regulating the applicant’s relationship with other companies,

ii. transferring the applicant’s functions to other companies, and

iii. the contents of which influence the financial situation of the company,

(c) its insurance products, including proposal forms and policy wording and rates, and

(d) its risk management systems.

(4) The Commission may require an applicant to furnish it with other documentation or information it considers necessary to determine the application.

(5) The applicant shall pay a fee determined by the Commission for the licence.

22. Issue of insurer’s licence

(1) The Commission may issue an insurer’s licence to an applicant subject to conditions the Commission may determine.

(2) The Commission shall, in issuing a licence, be satisfied that

(a) the applicant is qualified to carry on the class of insurance business for which the application is made,

(b) each director and principal officer of the applicant and of any holding company of the applicant is qualified to be concerned with the management of the class of insurance business for which the application is made,

(c) the applicant intends, to carry on the approved class of insurance business in this country if issued with a licence,

(d) where the applicant is associated with one or more other persons, the relationship between the applicant and those persons will not prejudice the effective supervision of the insurance business to be carried on by the applicant or be contrary to the interests of policyholders,

(e) the organisation, management and financial resources of the applicant are adequate for the carrying on of the class of insurance business for which the application is made,

(f) the insurance business will be conducted in accordance with sound insurance principles,

(g) issuing the licence is not against public interest, and

(h) the applicant satisfies the requirements of this Act in respect of the application and will, upon issue of the licence, operate in compliance with this Act, Regulations, the Codes of Practice and where applicable, the Market Conduct Rules.

23. Persons not qualified to be issued with insurance licence

An applicant does not qualify to be issued with a licence to carry on insurance business unless the Commission is satisfied that,

(a) the applicant,

(b) a person who has a share or an interest in the applicant, whether legal or equitable, where the applicant is not a public company,

(c) a person associated with the applicant, and

(d) a principal member of the applicant, where the applicant is a mutual company, is a fit and proper person to carry on insurance business.

24. Commission may issue conditions

(1) Without limiting the scope of section 22, the Commission may by written notice require an applicant either prior to the issue of a licence or as a condition of granting the licence

(a) to increase its capital to an amount greater than the minimum, or

(b) to maintain a solvency margin greater than the minimum.

(2) A notice under subsection (1) takes effect as a direction under section 69 (2) or section 71 (2) as the case may be, upon the issue of a licence to the applicant.

25. Form of insurer’s licence

(1) An insurer’s licence shall be in writing and shall specify

(a) the class of insurance business that the insurer is authorised to carry on, and

(b) the conditions to which the insurer is subject.

(2) The licence may

(a) be restricted to re-insurance business, or

(b) stipulate that the insurer may not carry on re-insurance business.

26. Restriction on licensing composite insurance companies and specialisation

(1) The Commission shall not issue a licence after the commencement of this Act that authorises the insurer to operate a composite insurance business.

(2) A company licensed to operate

(a) Life Assurance business as a speciality shall not be licensed subsequently to operate a Non-life Insurance business, and

(b) Non-life Insurance business as a speciality shall not be licensed subsequently to operate Life Assurance business.

(3) Despite subsection (2), a company

(a) licensed to operate a Life Assurance business may acquire substantial shareholding in a Non-life Insurance company, and

(b) licensed to operate a Non-life Insurance business may acquire substantial shareholding in a Life Assurance company.

27. Submission of licence to Commission

(1) An insurer shall submit its licence to the Commission where

(a) the licence expires,

(b) the licence is suspended or revoked, or

(c) it is required by the Commission to do so for a stated reason.

(2) An insurer that contravenes subsection (1) is liable to pay to the Commission the pecuniary penalty stated in the First Schedule.

28. Publication of issue of licence

Where the Commission issues a licence under section 22 it shall cause notice of the issue of the licence to be published in the Gazette and any newspaper of mass circulation that the Commission may determine.

29. Duration of licence

(1) A licence issued by the Commission expires twelve months from the date of issue and may on application be renewed.

(2) Where an application for renewal of a licence is made on or before the date specified in section 34 (2) (d) but is not determined by the Board by the expiry date, the licence shall continue in force until the application for renewal is determined by the Board.

30. Variation of conditions of licence

(1) The Commission may, on giving thirty days’ written notice to an insurer

(a) vary or revoke a condition for a licence, or

(b) impose new conditions on the insurer.

(2) An insurer may apply to the Commission in writing for a licence condition to be revoked or varied.

(3) Where, on an application made under subsection (2), the Commission is satisfied that the condition for a licence is no longer necessary or should be varied, it may revoke or vary the condition.

(4) Where the Commission revokes or varies a condition for a licence or imposes a new condition, the insurer shall deliver its licence to the Commission for the licence to be varied accordingly.

31. Refusal, suspension or revocation of licence

The Commission may

(a) refuse to issue a licence,

(b) issue a licence but refuse to authorise all the classes of insurance business requested in the application, or

(c) suspend or revoke a licence, and it shall notify the applicant or the affected licence holder in writing of its decision, stating the reasons.

32. Notice of refusal to grant application

Where the Commission refuses to grant an application for a licence the Commission shall notify the applicant in writing of its refusal to grant the application stating the reasons within thirty days.

33. Appeal to the High Court

(1) A person aggrieved by the refusal of the Commission to grant an application for licence may within sixty days after the date of the notice of refusal appeal to the High Court.

(2) Where the appeal is allowed the Commission shall license the applicant.

34. Application for renewal

(1) An insurer may apply to the Commission for the renewal of its licence.

(2) An application under subsection (1) shall

(a) be in writing,

(b) contain the prescribed information and be in the prescribed form,

(c) be accompanied with the prescribed documentation and renewal fee, and

(d) be made not later than

i. three months before the date of expiry of the licence, or

ii. a later date the Commission permits.

(3) The Commission may require an insurer to furnish it with such other documentation and information as it considers necessary to determine the application for renewal of licence.

35. Renewal of insurer’s licence

(1) The Commission shall renew the licence of an insurer where the Commission is satisfied that the insurer

(a) continues to meet the requirements for the issue of the licence, and

(b) is in compliance with this Act and Regulations made under it.

(2) The renewal of a licence under this section is effective from the date when the licence renewed would have expired but for the renewal.

36. Prohibition of unlicensed insurance business

(1) Subject to subsection (4), a person shall not carry on, or purport to carry on, a class of insurance business in the country unless that person holds a valid licence issued under section 22 authorising the person to carry on that class of insurance business.

(2) For the purposes of subsection (1), a company incorporated under the Companies Code, 1963 (Act 179) that carries on insurance business outside the country shall carry on insurance business from within the country.

(3) A person who carries on insurance business contrary to subsection (1) commits an offence.

(4) This section does not apply to an offshore insurer that enters into a re-insurance contract with an insurer where the re-insurance contract.

(a) is entered into in accordance with re-insurance arrangements approved by the Commission under section 53 (1), or

(b) is exempted from approval by the Commission under section 53 (3).

(5) For the purposes of subsection (1), “person” includes an association of underwriters.

37. Restriction on contract with offshore insurer

(1) Unless authorised by the Commission, a person shall not enter into a contract of insurance with an offshore insurer in respect of

(a) property situate in the country,

(b) liabilities arising in the country, or

(c) goods, other than personal effects, being imported into the country.

(2) A person who contravenes subsection (1) commits an offence.

(3) Nothing in this section affects the validity or enforceability of a contract of insurance entered into in breach of subsection (1).

(4) This section does not apply to an insurer that enters into a re-insurance contract with an offshore insurer where the re-insurance contract

(a) is entered into in accordance with re-insurance arrangements approved by the Commission under section 53 (1), or

(b) is exempted from approval by the Commission under section 53 (2).

38. Authorisation to enter into contract of insurance with offshore insurer

(1) A person may apply to the Commission, or through an insurance intermediary, for authorisation to enter into a contract of insurance of a type specified in section 37 (1) with an offshore insurer.

(2) The Commission may authorise the applicant to enter into a contract of insurance with an offshore insurer in respect of that risk subject to such conditions, as the Commission considers appropriate.

(3) In determining whether to grant an authorisation under subsection (2), the Commission shall have regard to the local capacity available to insure the risk in respect of which the application is made.

(4) Where the Commission issues an authorisation under subsection (2), the offshore insurer is considered not to be in breach of section 36.

(5) A person who is issued an authorisation under subsection (2) shall pay a premium to be determined by the Commission.

39. Restriction on contact office

(1) An offshore insurer shall not establish, maintain or carry on insurance business through a representative, branch or contact office in the country unless it has obtained the prior written approval of the Commission.

(2) A person shall not

(a) establish or maintain a place of business to solicit insurance business, or

(b) establish or maintain a representative, branch or contact office, in the country for an offshore insurer, unless the offshore insurer has obtained the written approval of the Commission under subsection (1).

(3) An application for approval under subsection (1) shall

(a) contain the prescribed information and be in the prescribed form; and

(b) be accompanied with the prescribed documentation.

(4) The Commission may require an offshore insurer to furnish it with such other documentation and information as it considers necessary to determine an application for approval made under subsection (1).

40. Conditions applicable to offshore insurer’s licence

(1) The Commission may approve an application under section 39 subject to the conditions that it considers appropriate.

(2) The Commission may, vary or revoke any condition to which the licence is subject, or impose new conditions on an offshore insurer upon giving reasonable written notice to the offshore insurer.

41. Offence for offshore insurer to carry on business without approval

An offshore insurer commits an offence where it

(a) carries on business contrary to section 39, or

(b) establishes, maintains or carries on business through a representative, branch or contact office contrary to conditions imposed by the Commission.

Insurance Business
42. Insurer to carry on insurance business only

(1) An insurer shall not carry on any business whether in the country or elsewhere, otherwise than for the purpose of its insurance business.

(2) Subsection (1) does not apply to a business specified in the Regulations made under this Act as business considered to be carried on in connection with or for the purposes of the insurance business of an insurer.

43. Insurer to carry on business in accordance with business plan

(1) An insurer shall submit its business plan to the Commission for approval.

(2) An insurer shall carry on its business substantially in accordance with the recent business plan lodged with and approved by the Commission.

(3) An insurer may, at any time, submit an amended business plan to the Commission together with an application for the Commission to approve the amended business plan.

(4) On receipt of an application for approval of an amended business plan, the Commission may require the insurer to provide it with such further information or documentation as the Commission requires to determine the application.

(5) The Commission may refuse to approve an amended business plan or may approve it subject to conditions the Commission considers appropriate.

44. Avoidance of contracts of insurance of unlimited amount

(1) Subject to subsection (2), a contract of insurance entered into by an insurer after the commencement date is void if it is a contract under which the insurer undertakes a liability the amount, or maximum amount, of which is uncertain at the time when the contract is entered into.

(2) Regulations may prescribe contracts of insurance, or classes or descriptions of contracts of insurance, that are exempt from subsection (1).

(3) This section applies to motor insurance contracts despite anything to the contrary in the Motor Vehicles (Third Party Insurance) Act, 1958 (No. 42).

(4) The Commission in consultation with the insurance industry shall by Regulations prescribe a formula to compute the compensation in respect of injury and deceased claims arising out of a motor accident.

45. Approval of insurance products

(1) An insurer shall not issue a new form of insurance product unless the Commission has given its prior written approval for the product.

(2) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

46. Head office and registered office

(1) An insurer shall have its head office in Ghana and shall notify the Commission of the address of its head office and of its registered office.

(2) Where the address of the head office or the registered office of an insurer changes, the insurer shall notify the Commission of the new address within fourteen days of the change.

(3) An insurer who contravenes subsection (2) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

47. Authorisation to open an offshore office

(1) An insurer shall not open, maintain or carry on business through a representative, branch or contact office offshore unless it has obtained the prior written approval of the Commission.

(2) An insurer that contravenes subsection (1) commits an offence and is liable on summary conviction to the penalty stated in the First Schedule.

48. Approval required for disposal of interest

(1) A person who owns or holds a significant interest in an insurance business shall not sell, transfer, charge or otherwise dispose of the interest in the insurance business, or a part of the interest, except with the prior written approval of the Commission.

(2) A person shall not, whether directly or indirectly, acquire a significant interest in an insurance business except with the prior written approval of the Commission.

(3) An insurer shall not, unless with the prior written approval of the Commission

(a) cause, permit or acquiesce in the sale, transfer, charge or other disposal referred to in subsection (1), and

(b) issue or allot any shares or cause, permit or acquiesce in any other reorganisation of its share capital that results in

i. a person acquiring a significant interest in the insurance business, or

ii. a person who already owns or holds a significant interest in the insurance business, increasing or decreasing the size of the interest.

(4) An application to the Commission for approval under subsection (1), (2) or (3) shall be made by the insurer.

(5) The Commission shall not grant approval under subsection (1), (2) or (3) unless it is satisfied that a person who will acquire a significant interest as a result of the approval is qualified to have an interest in the insurer.

(6) An approval under subsection (1), (2) or (3) may be granted by the Commission on such terms and conditions as the Commission considers appropriate.

(7) A person who contravenes subsection (1) or (2) or an insurer that contravenes subsection (3) commits an offence and is liable on summary conviction to the penalty stated in the First Schedule.

49. Appointment of directors and principal officers of an insurer

(1) An insurer shall not appoint a director or a principal officer without the prior written approval of the Commission.

(2) The Commission shall not grant an approval under subsection (1) unless it is satisfied that the person concerned is a qualified person to hold the proposed appointment.

(3) An approval under subsection (1) may be granted on terms and conditions the Commission considers appropriate.

(4) An insurer who contravenes subsection (1) is liable to pay the Commission the percuniary penalty stated in the First Schedule.

50. Termination of appointment of directors and principal officers of an insurer

(1) Where an insurer terminates the appointment of a director or a member of senior management staff, it shall, within fourteen days after the termination provide written notification to the Commission.

(2) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

51. Publication of authorised and subscribed capital

(1) An insurer shall not publish or issue a document in which is printed a statement of

(a) its authorised capital, unless the statement also sets out the amount of its subscribed capital and of its paid-up capital, or

(b) of its subscribed capital, unless the statement also sets out the amount of its paid-up capital.

(2) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

52. Prohibition on payment of commission to unlicensed insurance intermediary

(1) An insurer shall not pay any commission to an insurance intermediary that is not licensed under this Act.

(2) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

53. Approval of re-insurance arrangements by Commission

(1) An insurer shall have arrangements approved by the Commission in accordance with the Regulations for the re-insurance of liabilities in respect of risks insured by the insurer in the course of its business as an insurer.

(2) An insurer or re-insurer shall utilise the local capacity available in insurance business originating from the local market before recourse to any overseas re-insurance.

(3) The Commission may, by written notice, exempt re-insurance contracts of a type specified in the notice from the requirements for approval under subsection (1).

(4) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

54. Re-insurance statements and documents to be filed

(1) The Commission shall examine the

(a) retention policy of insurance companies,

(b) securities of re-insurers, and

(c) appropriateness of re-insurance contracts.

(2) For purposes of subsection (1), an insurer shall, on or before a date each year determined by the Commission for that insurer, file with the Commission a statement setting out the details as to its re-insurance arrangements as may be prescribed.

(3) The statement filed under subsection (2) shall be accompanied with copies of every re-insurance agreement referred to in the statement.

(4) A person who contravenes this section is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

55. Re-insurance of risks outside the country

(1) An insurer shall not enter into a contract of re-insurance except in the case of a facultative re-insurance arrangement.

(2) Subsection (1) does not apply to an insurer whose licence is restricted to re-insurance business.

(3) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

56. Appointment of actuary

(1) A long-term insurer shall have the services of an actuary at any time whose appointment has been approved by the Commission in writing.

(2) The Commission shall not approve the appointment of an actuary under subsection (1) unless it is satisfied that the individual concerned has sufficient experience and is competent to act as actuary of the insurer.

(3) A long-term insurer shall, within fourteen days of

(a) the appointment of its actuary, or

(b) a person ceasing to be its actuary, submit a notice in the prescribed form to the Commission.

(4) Where, for whatever reason, a person ceases to be the actuary of a long-term insurer, the long-term insurer is not in breach of subsection (1) if it appoints another qualified actuary within six weeks of the date the person who was previously appointed actuary ceases to hold that appointment.

(5) Subject to subsection (4), a long-term insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

57. Powers of Commission with regard to appointment of actuary

(1) Where the Commission is satisfied that the actuary of a long-term insurer has failed to fulfil obligations under this Act it may, revoke the approval of the appointment of the actuary by written notice to the long-term insurer and the insurer shall appoint a new actuary.

(2) A notice revoking the appointment of an actuary under subsection (1) shall be sent to the actuary.

(3) Where a long-term insurer fails to appoint an actuary, the Commission may appoint a qualified person to act as the actuary of the long-term insurer.

(4) An actuary appointed under subsection (3) is considered for the purposes of this Act to have been appointed by the long-term insurer.

58. Powers of actuary

(1) The actuary of a long-term insurer

(a) is entitled to have access to any information or document in the possession or under the control of the insurer where the actuary reasonably requires access for the proper performance of the actuary’s functions and duties, and

(b) may require any director or employee of the insurer to answer questions or produce documents for the purpose of enabling the actuary to properly perform the actuary’s functions and duties.

(2) A director or employee of a long-term insurer shall not refuse or fail, without reasonable excuse, to comply with a requirement under subsection (1) (b).

59. Obligations of actuary

(1) The actuary of a long-term insurer shall report immediately to the Commission where

(a) there are reasonable grounds for believing that the insurer or a director of the insurer may have contravened this Act or any other enactment, and

(b) that the contravention is of such a nature that it may adversely affect the interests of policy holders of the insurer.

(2) The actuary of a long-term insurer shall report to the insurer any matter relating to the business of the insurer that the actuary has obtained in the course of acting as its actuary that, in the opinion of the actuary, requires action to be taken by the insurer, or its directors

(a) to avoid a contravention of this Act, or

(b) to avoid prejudice to the interests of policy holders of the insurer.

(3) Where the actuary of a long-term insurer reports to the insurer under subsection (2) and the insurer does not, within such time as the actuary considers reasonable, take the action required, the actuary shall report the matter to the Commission.

(4) Where the appointment of an actuary of a long-term insurer is terminated, the actuary shall

(a) immediately inform the Commission of the termination of appointment and disclose to the Commission the circumstances that gave rise to that termination, and

(b) report any information which but for the termination of appointment would have been reported to the Commission as if the appointment had not been terminated.

(5) Where, in good faith, an actuary provides a report or information to the Commission under subsection (1), (2) or (4), the actuary is considered not to be in contravention of any enactment, rule of law or professional code of conduct to which the actuary is subject and no civil, criminal or disciplinary proceedings shall lie against the actuary in respect of it.

(6) The failure, in good faith, of an actuary to provide a report or information to the Commission under subsection (1), (2) or (4) does not confer upon any other person a right of action against the actuary which, but for that failure, the person would not have had.

(7) An actuary who contravenes subsection (1), (2), (3) or (4) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

60. Actuary to comply with prescribed standards

The actuary of a long-term insurer, in the performance of functions and the exercise of power, shall comply with relevant actuarial standards.

61. Annual actuarial investigations

(1) A long-term insurer shall, at least once each year, cause an investigation to be made into its financial condition in respect of its long term insurance business by its actuary.

(2) An investigation under subsection (1) shall comply with such requirements as may be prescribed.

(3) The actuary shall produce a report of the actuary’s investigation under subsection (1) containing information and in a form that may be prescribed.

62. Attendance of meetings by actuary

(1) The actuary of a long-term insurer is entitled to attend meetings of the directors of the insurer and to speak on a matter being considered at the meeting

(a) that relates to, or may affect the adequacy of the capital of the insurer, its solvency, its reserves or its financial condition,

(b) that relates to advice given by the actuary to the directors, and

(c) that concerns a matter in relation to which the actuary is or will be required to investigate, report on or give advice.

(2) The actuary of a long-term insurer is entitled to attend any general meeting of the insurer at which

(a) the insurer’s accounts or financial statements are to be considered, or

(b) any matter in connection with the actuary’s functions or duties is to be considered, and to speak on the matter being considered at the meeting.

63. Refusal to co-operate with actuary

Where, without reasonable excuse

(a) a long-term insurer fails or refuses to provide its actuary with access to the documents and information specified in section 58 (1) (a), or

(b) a director or employee of the insurer contravenes section 58 (1) (b), the actuary may report the matter to the Commission.

64. Actuarial investigation and report

(1) The Commission may at any time, by notice, direct an insurer to cause an actuary to investigate the aspects of its financial condition that the Commission may specify in the notice and to provide the Commission with the report prepared by the actuary.

(2) A report prepared under subsection (1) shall be at the cost of the insurer.

(3) The Commissioner may direct that the actuarial investigation is carried out by the actuary appointed by the insurer, if any, or by any other actuary the Commission specifies.

65. Application for a scheme of transfer or amalgamation

(1) Subject to section 68, a part of an insurance business may not be

(a) transferred to another person, or

(b) amalgamated with the business of another person, except under a scheme that complies with this section and sections 66 and 67 are approved by the Commission.

(2) Application to the Commission for the approval of a scheme shall be made jointly by or on behalf of the insurer and a person who is a party to the scheme.

(3) An application under subsection (2) shall be in a form, contain information and be accompanied with documentation that may be prescribed.

(4) Notice of the application shall be published in the Gazette and in a newspaper of mass circulation that the Commission may determine and notice of the application together with an approved summary of the scheme shall be sent to every policyholder affected by the scheme.

(5) The notice of the scheme shall contain a statement that representation may be made to the Commission concerning the scheme on or before a date not later than two months after the date of the publication in the Gazette.

(6) Before determining an application under this section, the Commission may

(a) at the cost of the insurer, undertake an investigation into the desirability or otherwise of the scheme, and

(b) require the insurer and each party to the scheme to provide the Commission with the documents and information it requires.

(7) An investigation under subsection (6) may be carried out by the Commission or by one or more persons appointed by the Commission to act on its behalf.

(8) A transaction to which an insurer is a party which has the effect of transferring a part of the business of an insurer to another person or amalgamating a part of the business of the insurer with the business of another person is void unless effected under a scheme approved by the Commission.

66. Details of scheme

A scheme shall set out

(a) the terms of the agreement or deed under which the proposed transfer or amalgamation is to be carried out,

(b) particulars of other arrangements that are necessary to give effect to the scheme, and

(c) contain other information that may be prescribed.

67. Commission may conduct hearing of application

(1) The Commission may, where it considers it necessary, conduct a hearing of the application at which the insurer, each party to the scheme and any interested person who has made representations to the Commission concerning the scheme are entitled to attend and be heard either in person, or in the case of a company through an officer, or a legal representative.

(2) At a hearing conducted under subsection (1), the Commission may consider evidence that it considers appropriate.

(3) Where the Commission confirms the scheme,

(a) it is binding on the parties to it, and

(b) it has effect despite anything to the contrary in the memorandum or articles of association of the insurer or of any company that is a party to the scheme.

(4) A copy of the confirmed scheme shall be filed with the Registrar of Companies.

68. Application of Part S of the Companies Code

(1) An insurer may effect an arrangement or amalgamation in accordance with Part S of the Companies Code subject to this section.

(2) An insurer shall not pass a special resolution under section 230 of the Companies Code putting the company into members’ voluntary liquidation for the purposes of an arrangement or amalgamation unless the Commission has given its prior written consent to the resolution.

(3) A resolution passed by an insurer under section 230 of the Companies Code without the prior written consent of the Commission is void.

(4) An arrangement or amalgamation effected in respect of an insurer under Part S of the Companies Code is of no effect unless approved by the Court in accordance with sections 231 to 233 of the Companies Code.

(5) The Commission is entitled to appear and be heard at every hearing in respect of an arrangement or amalgamation under Part S of the Companies Code.

Capitalisation, Solvency and Financial Provisions
69. Maintenance of capital by insurer

(1) An insurer shall ensure that its capital is maintained in an amount which is not less than

(a) the minimum capital applicable to the insurer as stated in the Second Schedule, or

(b) the amount that the Commission may by notice direct under subsection (2).

(2) Where, having regard to the nature and extent of the insurance business carried on by the insurer, the Commission considers it appropriate, the Commission may by notice direct an insurer to increase its capital to an amount greater than the prescribed minimum capital applicable to the insurer.

(3) A direction issued under subsection (2) shall specify a reasonable time period for compliance with the direction.

(4) Where the capital of an insurer falls below the amount that it is required to be maintained under subsection (1), it shall immediately notify the Commission in writing.

(5) An insurer is liable to pay to the Commission the percuniary penalty stated in the First Schedule, where

(a) it knowingly causes or permits its capital to fall below the amount that it is required to maintain, or

(b) it does not inform the Commission immediately of the fall in its capital.

70. Shares to be fully paid for in cash

(1) A share of an insurer issued on or after the commencement date shall be fully paid for in cash.

(2) For the purposes of subsection (1), “paid for in cash” has the meaning specified in section 45 of the Companies Code.

(3) The Commission may, on the application of an insurer, authorise the insurer to issue one or more shares otherwise than in accordance with subsection (1).

(4) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

71. Solvency margin

(1) An insurer shall ensure that at all times it maintains a solvency margin not less than

(a) the solvency margin calculated in accordance with Regulations, or

(b) the solvency margin that the Commission may direct under subsection (2).

(2) Where, having regard to the nature and extent of the insurance business carried on by the insurer, the Commission considers it appropriate, it may by notice direct an insurer to maintain a larger solvency margin than that prescribed.

(3) A direction issued under subsection (2) shall specify a reasonable time period for compliance with the direction.

(4) Where the solvency margin of an insurer falls below the amount that it is required to maintain under subsection (1), the insurer shall immediately notify the Commission in writing.

(5) An insurer that contravenes subsection (4) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

72. Reserves

(1) An insurer shall ensure that it maintains reserves in an amount equal to or greater than that prescribed in Regulations in respect of the insurance business which it is authorised to carry on.

(2) Where the amount of reserves maintained by an insurer falls below the amount that it is required to maintain under subsection (1), it shall immediately notify the Commission in writing.

(3) An insurer that contravenes subsection (2) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

(4) Where the amount of reserves maintained by an insurer falls below the amount the insurer is required to maintain in accordance with Regulations made under subsection (1), the Commission shall by notice direct the insurer to increase the reserves to the required level.

(5) An insurer who does not comply with a directive issued by the Commission under subsection (4) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

73. Deposit

(1) The Commission shall, by notice require an insurer or re-insurer to deposit ten percent of its minimum capital with the Bank of Ghana in Government securities.

(2) The Commission may, by notice at any time increase the deposit to be provided by an insurer or re-insurer.

(3) A notice issued under subsection (1) or (2) shall specify a reasonable period within which the deposit, or increased deposit, shall be made.

(4) An insurer that is required by a notice issued under subsection (1) to make a deposit with the Bank of Ghana is liable to pay to the Commission the percuniary penalty stated in the First Schedule if it does not make the deposit within the time period specified in the notice.

74. Return of deposit

(1) Where the Commission is satisfied that there is good reason for some or all of a deposit made under section 73 to be returned to an insurer, the Commission may by notice authorise the return of the deposit to the insurer.

(2) Subject to subsection (3), a deposit made by an insurer under section 73 shall not be returned to the insurer unless the Commission has issued a notice authorising the return under subsection (1).

(3) Despite subsection (2), where an insurer is in liquidation or in judicial management, the court may order that a deposit made under section 73 shall be returned to the liquidator or judicial manager subject to such conditions as the court considers appropriate.

75. Distribution

(1) An insurer shall not make a distribution to a shareholder unless, after the distribution

(a) its capital equals or exceeds the capital that it is required to maintain under section 69 (1),

(b) its solvency margin equals or exceeds the solvency margin that it is required to maintain under section 71 (1), and

(c) its reserves equal or exceed the reserves that it is required to maintain under section 72 (1).

(2) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

(3) For the purposes of this section, “distribution”, in relation to a distribution by a company to a shareholder means,

(a) the direct or indirect transfer of money or property, other than the company’s own shares, to or for the benefit of the shareholder, or

(b) the incurring of a debt to or for the benefit of a shareholder in relation to shares held by that shareholder and whether by means of a purchase of property, the redemption or other acquisition of shares, a distribution of indebtedness or by some other means, and includes a dividend.

76. Prohibition relating to advances and loans

(1) An insurer shall not after the commencement of this Act

(a) acquire or deal in its own shares or lend money or make advances on the security of its own shares,

(b) lend any of its funds to a connected person,

(c) grant unsecured credit to a person except, in the case of a short-term insurer, for temporary cover not exceeding the prescribed period, or

(d) enter into a guarantee or provide a security in connection with a loan by another person to a connected person.

(2) The Regulations shall specify persons who are connected persons for the purposes of subsection (1).

(3) Subsection (1) does not apply to a distribution permitted under section 75.

(4) An insurer that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

77. Approval of premium and rates by Commission

(1) The Commission may, by notice, approve minimum rates of premium and commission to be charged by an insurer for any insurance policy issued in respect of a class of insurance business specified in the notice.

(2) A notice may be limited to certain specified types of policy within the class of insurance business specified in the notice.

(3) The notice

(a) takes effect from the date of its issue or such later date as may be specified in the notice, and

(b) remains in effect until revoked by the Commission by the issue of a revocation notice.

(4) The Commission shall, within fourteen days after the date of issuing a notice or revoking a notice, send a copy of the notice to each insurer authorised to carry on business of the class specified in the notice.

(5) Where the notice is in effect, an insurer who issues a policy of insurance at a rate of premium lower than that specified in the notice despite having received the notice proof of which shall be on the insurer is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

(6) An insurer may offer to an insured, a policy which makes the insurer liable to compensate the insured on the occurrence of an event covered by the policy, within ninety days of the insured’s default in paying the premium.

(7) An insurer shall after ninety days of an insured’s premium payable becoming accrued, charge interest on the accrued sum from the date of the insured’s default, at a rate determined by the Commission in consultation with the Minister for Finance.

Accounts and Audit of Insurers
78. Accounts record

(1) An insurer shall keep accounting records

(a) that are sufficient to explain its transactions and financial position with respect to its insurance business and any other business that it carries on,

(b) that enable it to prepare the accounts and make the returns required by this Act and Regulations, and

(c) that enable its accounts to be audited in accordance with this Act and Regulations.

(2) An insurer shall retain accounting records for a period of at least six years after the completion of the transaction to which they relate.

(3) An insurer shall

(a) keep its accounting records in the country, and

(b) notify the Commission in writing of the place in the country where its accounting records are kept.

(4) An insurer that contravenes this section is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

79. Financial year of insurer

The financial year of an insurer shall be the same as the financial year of Government.

80. Preparation and lodgement of accounts of insurer

(1) An insurer shall, in respect of each financial year, prepare

(a) a revenue account for the year,

(b) a balance sheet as at the last day of the year,

(c) a profit and loss account for the year, and

(d) any other accounts and financial statements that may be directed by the Commission.

(2) The accounts and statements specified in subsection (1) shall be lodged with the Commission within four months after the end of the financial year to which the accounts and statements relate and shall be accompanied with

(a) a director’s certificate,

(b) an auditor’s report,

(c) in the case of an insurer authorised to carry on long-term business, a report in respect of the financial year prepared by the actuary appointed by the insurer under section 56,

(d) any report on the affairs of the insurer made to the members or policyholders of the insurer in respect of the relevant financial year, and

(e) the other documents that may be prescribed, in each case, containing such information and in the form that may be prescribed.

(3) Unless accompanied by the certificates, reports and documents specified in subsection (2), the accounts and statements referred to in subsection (1) are considered not to have been lodged with the Commission.

(4) An insurer that contravenes subsection (1) or (2) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

81. Lodgement of quarterly accounts and report

(1) An insurer shall, in respect of each quarter, lodge with the Commission

(a) a revenue account for the quarter,

(b) a balance sheet as at the last day of the quarter,

(c) a profit and loss account for the quarter, and

(d) the other reports, accounts and financial statements that may be prescribed.

(2) The reports, accounts and financial statements specified in subsection (1) shall be lodged with the Commission within six weeks after the end of the quarter accompanied by a director’s certificate containing the information and in the form prescribed.

(3) Unless they are accompanied with a directors’ certificate complying with the Regulations, the reports, accounts and financial statements referred to in subsection (1) are considered not to have been lodged with the Commission.

(4) An insurer that contravenes this section is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

82. Extension of time

(1) The Commission may, on the application of an insurer, extend the time for compliance with section 80 (2), section 81 (2) or section 56 (4) for a period of one month, or where it grants more than one extension for an aggregate period not exceeding three months.

(2) An extension under subsection (1) may be granted subject to any condition the Commission considers appropriate.

83. Amendment of accounts

(1) Where the Commission considers that a document lodged by an insurer under section 80 or section 81 is inaccurate or incomplete or is not prepared in accordance with this Act and Regulations, the Commission may by notice require the insurer to amend the document or lodge a replacement document.

(2) Where an insurer fails to comply with a notice under subsection (1), the Commission may amend the document itself or reject the document.

(3) A document amended by the Commission or by the insurer is considered as having been lodged in its amended form.

84. Group accounts

(1) Where an insurer is a member of a group of companies, the Commission may require the insurer to lodge group accounts.

(2) The Commission may require that the group accounts are audited by the auditor of the insurer or by another auditor approved by the Commission.

(3) Regulations may provide for the form and content of group accounts to be lodged under this section.

85. Insurer to appoint an auditor

(1) An insurer shall appoint an auditor for the purposes of auditing

(a) the accounts referred to in paragraphs (a) to (c) of section 80 (1), and

(b) the accounts and statements referred to in section 80 (1) (d) that the Regulations made under this Act specify shall be audited.

(2) An auditor shall not be appointed under subsection (1) unless

(a) the auditor is qualified under Regulations to act as the auditor of an insurer, and

(b) the Commission has given its approval in writing to the auditor’s appointment.

(3) The Commission shall approve the appointment of an auditor where it is satisfied that the auditor has sufficient experience and is competent to audit the accounts of the insurer.

(4) An insurer shall make the arrangements that are necessary to enable its auditor to audit its accounts and financial statements in accordance with this Act.

(5) Despite subsection (2), the approval of the Commission is not required where the auditor appointed in respect of a financial year acted as the auditor of the insurer in the previous financial year.

(6) An insurer that fails to appoint an auditor in accordance with subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

(7) An insurer shall, within fourteen days of the appointment of its auditor, submit a notice of appointment in the prescribed form to the Commission; failure to notify the Commission attracts the percuniary penalty stated in the First Schedule and is payable to the Commission.

86. Audit report

(1) Upon completion of the audit of the accounts and financial statements referred to in section 85 (1), the auditor of an insurer shall submit an audit report to the insurer.

(2) The Commission may at any time, by notice in writing, direct an insurer to supply the Commission with a report, prepared by its auditor or other person nominated by the Commission, on such matters as the Commission may determine which may include an opinion on asset quality, adequacy of provisions for losses and the adequacy of the accounting and control systems.

(3) A report prepared under subsection (2) shall be at the cost of the insurer.

87. Obligations and termination of appointment of auditors

(1) Despite anything to the contrary in any other enactment, the auditor of an insurer shall

(a) provide the Commission with a copy of the audit report submitted to the insurer under section 86 (1), and

(b) report immediately to the Commission any information that relates to the affairs of the insurer that has been obtained and which in the opinion of the auditor, suggests that

i. the insurer is insolvent or is likely to become insolvent or is likely to be unable to meet its obligations,

ii. a criminal offence has been or is being committed by the insurer in connection with its business,

iii. the insurer is in breach of section 69, 70, or 72, or

iv. serious breaches of this Act, Regulations, the Code of Practice or the Market Conduct Rules have occurred in respect of the insurer or its insurance business.

(2) Where the appointment of an auditor is terminated, that auditor shall

(a) immediately inform the Commission of the termination of the auditor’s appointment and disclose to the Commission the circumstances that gave rise to such termination, and

(b) where, but for the termination of the auditor’s appointment, the auditor would have

i. sent an audit report to the Commission under subsection (1) (a), or

ii. reported information to the Commission under subsection (1) (b), the auditor shall send a copy of the report to the Commission, or report the information concerned to the Commission, as if the appointment had not been terminated.

(3) The Commission may require an auditor of an insurer to discuss an audit the auditor has conducted or commenced with, or provide additional information regarding the audit to the Commission.

(4) Where, in good faith, an auditor provides a report or an information to the Commission under subsection (1), (2) or (3), the auditor is not considered to be in contravention of any enactment, rule of law or professional code of conduct to which the auditor is subject and civil, criminal or disciplinary proceedings shall not lie against the auditor in respect of the report or information.

(5) The failure, in good faith, of an auditor to provide a report or information to the Commission under subsection (1), (2) or (3) shall not confer upon any other person a right of action against the auditor which, but for that failure, the person would not have had.

(6) An auditor or former auditor who contravenes subsection (1) or (2) is liable to pay to the Commission the pecuniary penalty stated in the First Schedule.

(7) For the purposes of subsection (1), an insurer is considered to be insolvent where the total value of its assets does not exceed the total amount of its liabilities by at least the minimum margin of solvency that it is required to maintain under section 71 (1).

88. Powers of Commission with regard to appointment of auditor

(1) Where the Commission is satisfied that the auditor of an insurer has failed to fulfil an auditor’s obligations under this Act or is otherwise disqualified to act as the auditor of an insurer, the Commission may, by written notice to the insurer, revoke the approval of the appointment of the auditor and the insurer shall appoint a new auditor in accordance with section 85.

(2) A notice revoking the appointment of an auditor under subsection (1) shall be given to the auditor.

(3) Where an insurer fails to appoint an auditor, the Commission may appoint a person qualified under the Regulations to act as the auditor of the insurer.

89. Auditor may rely on actuarial valuations

(1) The auditor of a long-term insurer may accept, for the purposes of an audit under this Act, a valuation by the actuary appointed by the insurer of

(a) the policy liabilities of the company as at the end of the financial year of the insurer, or

(b) a change, during a financial year, in the policy liabilities of the insurer in relation to a particular fund.

(2) Without limiting to subsection (1), an external auditor shall not rely solely on the valuations of the actuary but shall carry out an independent review and examination to express an opinion on the financial statement.

90. Provisions do not limit Companies Code

Sections 78 to 89 does not limit the application of the accounts and audits provisions of the Companies Code to an insurer that is subject to that Code and, unless this Act or the Regulations provide otherwise, the accounts and financial statements of an insurer lodged with the Commission, including any group accounts, shall be prepared in accordance with the Code.

Liquidation and Judicial Management of Insurance Companies
91. Insurer not to be wound up by private liquidation

(1) An insurer shall not be wound up by a private liquidation under the Companies Code.

(2) A resolution of an insurer to be wound up by private liquidation under the Companies Code is void.

92. Modification of Act 180

The provisions of the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180) relating to the official liquidation of companies are modified in respect of insurers and companies carrying on unlicensed insurance business to the extent specified in section 91 to 113.

93. Commencement of proceedings

(1) The official winding up of a long-term insurer may only be commenced by a petition to the Court.

(2) The official winding up of a short-term insurer may be commenced by a special resolution of the company where the Commission has given its prior written consent to the passing of the resolution.

(3) A resolution

(a) of a long-term insurer to appoint a liquidator in contravention of subsection (1), or

(b) of a short-term insurer to appoint a liquidator in contravention of subsection (2), is void.

(4) Where the members of a short-term insurer appoint a liquidator in accordance with this section, the Commission may by notice direct the liquidator to publish the appointment in a manner that is specified in the notice.

(5) A liquidator who fails to publish its appointment in accordance with a direction of the Commission issued under subsection (4) is liable to pay to the Commission the pecuniary penalty stated in the First Schedule.

94. Application for liquidation by Commission

(1) For the purposes of Act 180, an insurer is considered to be insolvent where the total value of the insurer’s assets does not exceed the total amount of its liabilities by at least the minimum margin of solvency that it is, or was, required to maintain under section 71 (1).

(2) The Commission may pursuant to Act 180, present an application or petition to the Court for official liquidation of an insurer or a company that is carrying on or has carried on, unlicensed insurance business.

(3) On a petition presented under subsection (2), the Court may make an order for the official liquidation of the insurer

(a) on any ground specified in Act 180,

(b) where the Court is satisfied that it is in the public interest that the company be wound up, or

(c) in the case of an insurer, where the insurer has failed to lodge with the Commission, within the period specified, the documents specified in section 80 (2).

(4) On the hearing of a petition for the official liquidation of an insurer, evidence that the insurer has, at any time prior to the date of the presentation of the petition been insolvent is, unless the contrary is proved, evidence that it continues to be insolvent.

95. Service on Commission

A petition for the official liquidation of an insurer shall, where presented by a person other than the Commission, be served on the Commission and the Commission is entitled to appear and be heard at the hearing of the petition.

96. Reduction of contracts as alternative to official liquidation

Where on the hearing of a petition for the official liquidation of an insurer, the Court is satisfied that the insurer is insolvent, it may reduce the amount of the insurer’s contracts on conditions that the Court considers just, instead of making an order for the official liquidation of the insurer.

97. Continuation of long-term business by liquidator

(1) The liquidator of a long-term insurer shall, unless the Court otherwise orders, carry on the long-term business of the insurer with a view to it being transferred as a going concern to another insurer, whether in existence or to be incorporated for the purpose.

(2) In carrying on the insurer’s long-term business under subsection (1), the liquidator may agree to the variation of any contracts of insurance at the commencement of the official liquidation, but the insurer shall not effect a new contract of insurance.

(3) On the application of the liquidator of a long-term insurer, the Court may by order reduce the amounts of the contracts made by the company in the course of carrying on its long-term business.

(4) An order under subsection (3) may be made subject to conditions that the Court considers appropriate.

(5) The liquidator of a long-term insurer,

(a) may appoint an actuary to investigate and report to the insurer on the long-term business of the insurer and, where appropriate, to conduct actuarial valuations of the business, and

(b) may apply to the Court for the appointment of a special manager to manage the business of the insurer.

(6) A special manager appointed by the Court

(a) shall act in accordance with such directions that may be given to it by the court,

(b) shall give security and account in the manner that the Court may direct, and

(c) is entitled to be paid such remuneration as may be determined by the Court.

98. Protection of segregated funds and assets

(1) Despite Act 180, in the official liquidation of a long-term insurer, the assets of the funds maintained by the insurer in respect of its long-term business shall first be applied to meet the insurer’s long-term liabilities attributable to the funds.

(2) Where the value of the assets referred to in subsection (1) exceeds the amount of the long-term liabilities of the insurer attributable to the funds, the excess is an asset of the insurer available for distribution in accordance with Act 180.

(3) Where the Court makes an order under Act 180 in respect of a long-term insurer requiring a person to repay, restore or account for money or other assets, to pay compensation to the insurer or to pay interest to the insurer, the court shall, in so far as the delinquency relates to assets belonging to the insurer’s long-term funds, order that the money, assets or contribution is to be treated for the purposes of subsection (1) as assets of those funds.

99. Judicial management order

(1) A judicial management order is an order directing that, during the period for which the order is in force, an insurer, or the part of the business of an insurer that is specified in the order, be managed by a judicial manager appointed by and under the control of the court.

(2) The Court may make a judicial management order in respect of an insurer where it is satisfied that it is in the interests of the insurer’s policyholders to do so.

(3) The judicial management of an insurer commences on the date of the judicial management order, or the later date that may be specified in the order and terminates when the judicial management order is discharged under section 109.

100. Application for judicial management order

(1) Application for a judicial management order may be made by the insurer or by the Commission.

(2) An application for a judicial manager shall be served

(a) where application is made by the insurer, on the Commission not later than thirty days before the date fixed for the hearing of the application, or

(b) where application is made by the Commission, on the insurer not later than five days before the date fixed for the hearing of the application.

(3) The insurer and the Commission are both entitled to appear and be heard on an application for a judicial management order.

(4) Where it is satisfied that the application is urgent, the Court may reduce the time for service specified in subsection (2).

101. Moratorium

During the period in which a judicial management order is in force in respect of an insurer, except with the leave of the Court or with the consent of the judicial manager

(a) steps shall not be taken to enforce any security over the insurer’s assets,

(b) steps shall not be taken to repossess assets that are being used or occupied by or are in the possession of the insurer,

(c) proceedings, execution or other legal process shall not be commenced or continued or distress levied against the insurer or its assets,

(d) a share shall not be transferred and an alteration shall not be made in the status of the members of the insurer, whether by an amendment of the memorandum or articles or in any shareholders’ or members’ agreement or otherwise, and

(e) a resolution of the members of the insurer shall not be passed.

102. Duties of judicial manager

(1) On making a judicial management order, the Court shall appoint a suitably qualified and experienced person to be the judicial manager.

(2) The judicial manager shall

(a) manage the business, assets and affairs of the insurer, or that part of the business, assets and affairs of the insurer in respect of which the judicial manager has been appointed, and

(b) take into custody and control the assets of the insurer or, where the judicial manager has been appointed in respect of only part of the business of the insurer, those assets necessary to enable the judicial manager to perform the function.

(3) A person who, immediately before the commencement of the judicial management of the insurer, is vested with the management of the insurer, or that part of the business of the insurer in respect of which the judicial management order is made, is divested of that management.

103. Additional duties of judicial manager

(1) The court may, on the application of the judicial manager or of the Commission at any time as it considers appropriate,

(a) give the judicial manager any additional duties, and

(b) give the judicial manager any directions concerning its duties and powers or in relation to any matter arising in the course of the judicial management.

(2) A judicial manager shall not issue or enter into any policies except with the leave of the Court.

104. Powers of judicial manager

Unless and to the extent that the Court otherwise orders, a judicial manager has the following powers:

(a) to bring or defend any legal proceedings in the name and on behalf of the company,

(b) to appoint a legal practitioner to help it in the performance of its functions,

(c) to appoint an actuary to assist it in the performance of its functions,

(d) to sell or otherwise dispose of any of the property of the company,

(e) to do all acts and execute in the name and on behalf of the company deeds, receipts and other documents,

(f) for the purpose of paragraph (d), to use the company’s common seal,

(g) to prove in the bankruptcy of any debtor of the company or under any deed executed under that Act,

(h) to draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company,

(i) to obtain credit, whether on the security of the company or otherwise,

(j) to take letters of administration of the estate of a deceased debtor, and to do anything necessary for obtaining payment of any money due from a debtor, or his or her estate, that cannot conveniently be done in the name of the company,

(k) to appoint an agent to do anything that it is not practicable for the judicial manager to do personally or that it is unreasonable to expect him or her to do personally, and

(l) the other powers that the court directs.

105. Information and notice of judicial manager

The judicial manager shall give the Commission

(a) the information that it may from time to time require, and

(b) notice of any application made to the court.

106. Appearance in Court

The Commission and the judicial manager are both entitled to appear and be heard on any application to the Court concerning the judicial management of an insurer, including an application for the discharge of the order.

107. Remuneration of judicial manager

(1) The judicial manager is entitled to be paid remuneration for services as judicial manager and to be reimbursed reasonable costs and expenses.

(2) The remuneration payable to the judicial manager, and the costs and expenses to be reimbursed shall be fixed by the court.

(3) Unless the Court otherwise orders,

(a) the remuneration, costs and expenses of the judicial manager are payable out of the assets of the insurer in respect of which the judicial manager is appointed, and

(b) the judicial manager has a charge over the assets of the insurer for remuneration, costs and expenses.

(4) Unless the Court otherwise orders, the charge specified in subsection (3)

(a) ranks in priority to any floating charge to which the assets of the insurer may be subject, and

(b) continues to subsist after the discharge of the judicial management order.

108. Removal of judicial manager and filling of vacancy

The Court, on the application of the insurer or the Commission may

(a) remove the judicial manager, and

(b) appoint another suitably qualified and experienced person as judicial manager in place of the judicial manager removed under paragraph (a) or fill a vacancy.

109. Discharge of judicial management order

(1) Application may be made to the court for the discharge of a judicial management order by the judicial manager, the Commission or by any other interested person.

(2) On an application under subsection (1), the court may discharge the judicial management order here it is satisfied that

(a) the purpose of the order has been fulfilled, or

(b) for a reason it is undesirable that the order should remain in force.

(3) An application under subsection (1) shall be served within the period before the date of the hearing as the court may direct where an application is made

(a) by an interested person, on the judicial manager and the Commission,

(b) by the Commission, on the judicial manager, and

(c) by the judicial manager, on the Commission.

(4) On the discharge of a judicial management order,

(a) the judicial manager is divested of the management of the insurer, or that part of its business in respect of which the judicial manager was appointed, and

(b) the management of the insurer or of its business re-vests in its directors.

110. Report of judicial manager

(1) As soon as practicable after appointment, a judicial manager shall file with the court a report recommending which of the following courses is in its opinion most advantageous to the general interests of the policy-holders of the insurer:

(a) the transfer of the business, or part of the business, of the insurer to some other insurer,

(b) the carrying on by the insurer of its business,

(c) the official liquidation of the insurer, or

(d) such other course of action as the judicial manager considers appropriate.

(2) In the report, the judicial manager

(a) may recommend different courses of action in respect of different parts of the insurer’s business, and

(b) shall set out the reasons for any recommendations made in the report.

(3) The judicial manager shall as soon as possible after filing the report

(a) provide a copy to the Commission, and

(b) apply to the Court for an order to give effect to the recommendations within the report.

(4) The report is a document to which the public may have access.

111. Order of Court on report of judicial manager

(1) On an application under 110 (3) (b), the Court may make an order giving effect to such course of action as it considers to be most advantageous to the interests of the policyholders of the insurer.

(2) An order under subsection (1) is binding and takes effect despite anything in the memorandum or articles of association of the insurer.

112. Transfer of business to another company

Where the Court makes an order for the transfer of the business, or part of the business of an insurer to another insurer, the judicial manager shall prepare a scheme for the transfer in accordance with this Act and until the scheme is confirmed by the Court, the management of the insurer, or that part of the insurer as the case may be, continues to be vested in the judicial manager.

113. Indemnity of judicial manager

A judicial manager is not subject to any liability to any person in respect of anything done, or omitted to be done, in good faith in the exercise of powers, functions performance or discharge of duties conferred or imposed on the judicial manager by this Act or by the court.

Insurance Intermediaries
114. Application for insurance intermediary licence

(1) A person may apply to the Commission for an insurance intermediary’s licence in one of the following categories:

(a) insurance broker;

(b) insurance agent;

(c) insurance sub-agent; or

(d) insurance loss adjuster.

(2) An application under subsection (1) shall be in writing and shall

(a) state the category of licence for which the application is made,

(b) where the application is for a licence to act as an insurance broker or an insurance loss adjuster, state the type and the class of business in respect of which the applicant seeks to be authorised,

(c) contain the prescribed information and be in the prescribed form, and

(d) be accompanied with the prescribed documentation.

(3) An application for a licence to act as an insurance agent or an insurance sub-agent shall be supported by the insurer with which the applicant is or will be contracted.

(4) The Commission may require an applicant under section 114-151 to furnish it with any other documentation or information it considers necessary to determine the application.

(5) The applicant shall pay a fee determined by the Commission for the licence.

115. Issue of insurance intermediary’s licence

(1) The Commission may issue an insurance intermediary’s licence to an applicant subject to any conditions the Commission may determine.

(2) An applicant does not qualify to be issued a licence unless the Commission is satisfied that in the category applied for,

(a) the applicant is a fit and proper person to act as an insurance intermediary,

(b) in the case of an applicant that is a body corporate

i. each person having a share or other interest in the applicant, whether legal or equitable is a fit and proper person to have an interest in the intermediary insurance business applied for, and

ii. each director and principal officer of the applicant and of any holding company of the applicant is a fit and proper person to be concerned with the management of the category of intermediary insurance business applied for,

(c) the applicant intends, if issued with a licence, to act as an insurance intermediary in the country,

(d) the applicant satisfies the requirements of this Act in respect of the application and will, upon the issue of the licence, be in compliance with this Act, the Regulations, the Codes of Practice and, where appropriate, the Market Conduct Rules,

(e) the organisation, management and financial resources of the applicant are adequate for an insurance intermediary in the category applied for, and

(f) the name of the applicant suggests that the applicant is carrying on insurance business, or acting as an insurance intermediary in the category that is being applied for.

(3) The Commission may issue a licence to the applicant subject to the other conditions that the Commission considers appropriate.

116. Insurance intermediary’s licence

A licence issued under subsection (1) shall be in writing and shall specify

(a) the category in respect of which the licence is issued,

(b) the conditions to which the licence is subject,

(c) where the category of the licence is insurance broker or insurance loss adjuster, the class of insurance business in respect of which the insurance intermediary is authorised to operate, and

(d) where the category of the licence is insurance agent or insurance sub-agent, the insurer by which the insurance intermediary is or will be appointed.

117. Restrictions on persons who may be licensed

(1) A licence as an insurance broker or an insurance loss adjuster shall only be granted to a company or a partnership.

(2) A director, officer or employee of a company holding a licence as an insurance broker, a partner or employee of a partnership holding a licence as an insurance broker or a person holding a significant interest in an insurance broker shall not be granted a licence as an insurance agent, an insurance sub-agent or an insurance loss adjuster.

(3) A director, officer or employee of an insurer and a person holding a significant interest in an insurer shall not be granted a licence as an insurance broker and shall not be a director, officer or employee of a person holding a licence as an insurance broker.

(4) A person holding a licence as an insurance agent or sub-agent shall not hold a licence as an insurance broker.

(5) A person holding a licence as an insurance broker shall not hold a licence as an insurance agent or sub-agent.

(6) A person holding a licence as an insurance loss adjuster shall not hold a licence as an insurance broker or an insurance agent or sub-agent.

118. Submission of licence to Commission

(1) An insurance intermediary shall submit its licence to the Commission where

(a) the licence is suspended or revoked, or

(b) it is required by the Commission to do so for a stated reason.

(2) An insurance intermediary that contravenes subsection (1) is liable to pay to the Commission the percuniary penalty stated in the First Schedule.

(3) In this section “insurance intermediary” includes a former insurance intermediary whose licence has expired or has been revoked.

119. Publication of issue of licence

Where the Commission issues a licence under section 116, it shall cause notice of the issue to be published in the Gazette and any newspaper of mass circulation that the Commission may determine.

120. Variation of conditions of licence

(1) The Commission may, upon giving reasonable written notice to an insurance intermediary,

(a) vary or revoke any licence conditions, or

(b) impose new conditions on the insurance intermediary.

(2) An insurance intermediary may apply to the Commission in writing for a condition to which its licence is subject to be revoked or varied.

(3) Where on an application made under subsection (2), the Commission is satisfied that the condition is no longer necessary or should be varied, it may revoke or vary the condition.

(4) Where the Commission revokes or varies a condition or issues a new condition, the insurance intermediary shall deliver its licence to the Commission which shall issue a replacement licence.

121. Duration of licence

(1) A licence expires twelve months from the date of its issue or of its last renewal.

(2) Where application for the renewal of a licence is made on or before the date specified in section 124 (2) (d) but has not been determined by the Commission when the licence is due to expire, the licence continues in force until the application for renewal is determined by the Commission and a renewal is considered to take effect from the date when the licence would have expired but for the renewal.

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