The rationale of section 19, 21 and 30 of Insurance Act of 2009.

 

Insurance Act[1] plays an important role in the governance and regulation of the insurance market within Tanzania. Three key sections—19, 21, and 30—forms an important foundation of the regulatory framework, each serving a distinct purpose aimed at ensuring stability, accountability, and consumer protection within the insurance sector.

Section 19: Financial or Share-Capital Stability

Section 19 establishes minimum paid-up share capital for registered insurers. It empowers a minister to prescribe the minimum paid-up share capital to be maintained by a registered insurer upon recommendation by the commissioner of insurance[2]. This provision, ensures that, registered insurers maintain a solid financial foundation. The provision also separates capital requirements for general and long-term insurers[3].

Section 21: Prohibition of Carrying Insurance Business without Registration

Section 21 prohibits unregistered entities from entering the insurance realm. It stipulates that no resident individual in Tanzania may commence insurance or reinsurance business without proper registration. The Minister holds the authority to grant exemptions, but only if the entirety of an insurer’s operations occurs outside Tanzanian borders. This section ensures that only registered entities carry business activities, promoting accountability and regulatory oversight[4].

Section 30: Consumer Protection and Regulatory Control

Section 30 protects consumers in the aftermath of an insurer’s registration cancellation. This provision restricts insurers from initiating new insurance policies or renewing existing ones after the expiration of a three-day grace period from the receipt of cancellation notice. The Commissioner or, in exceptional cases, the Minister can grant extensions up to twelve months, offering flexibility while maintaining regulatory control over insurers’ post-cancellation activities.

The essence of all these provisions is to ensure the insurance sector is full of qualified personnel and registered entities so as to be able to monitor them and makes them accountable for their defaults. Unregistered insurances may subject citizens to risk of loss of money.

REFERENCE

STATUTES

Insurance Act No. 10 of 2009

 

REPORTS

Bank of Tanzania (2010), “Financial Stability Report” ISSN 1821 – 7761

International Association of Insurance Supervisors (2011), “Insurance and Financial Stability” Pp 20

REGULATIONS

Insurance Regulation of 2009, Rule 13.

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[1] Insurance Act No. 10 of 2009

[2] Bank of Tanzania (2010), “Financial Stability Report” ISSN 1821 - 7761

[3] International Association of Insurance Supervisors (2011), “Insurance and Financial Stability” Pp 20

[4] Insurance Regulation of 2009, Rule 13.