The Internal Revenue Authority (IRA) has unveiled plans for a new policy to safeguard service delivery in the micro-insurance sector. According to the Authority, a statutory government agency under CAP  487 of the Laws of Kenya, the initiative will ensure that low income earners enjoy insurance services tailored that are to their needs. The move will also ensure that these services are provided by registered financial institutions.

“There are many promising products and so much interest in the new innovative products and services,” said Moses Obonyo, a member of the IRA Board of Directors.

Speaking on behalf of IRA CEO Sammy Makove during a stakeholder’s workshop at the College of Insurance on the 18^th of October, 2012, he noted that, despite the wide variety of services from the sector, insurance was hampered by high costs and slow take-off. He said that a survey by FinAccess revealed that almost only 7% of Kenyans have any kind of insurance at all. This represents about 3 million out of a total population of 43 million.

The new policy will set benchmarks for service delivery within the insurance sector. It will also suggest innovative ways of reaching out to special interest groups and associations in order to create awareness for micro insurance services across the country.

Obonyo said, “Insurers have not focused on widespread growth in the untapped market for micro insurance.”  He mentioned that a different concept of insurance was therefore necessary in order to facilitate growth by tapping into the potential within the informal sector.

Obonyo said that the new policy will outline measures aimed at harmonizing, facilitating, and encouraging the provision of insurance services in a well-managed and regulated environment.

The IRA reports that the proposal will serve as a framework aimed at reducing the risks faced by insured parties. This comes several weeks after Minister for Medical Services, Prof Anyang’ Nyong’o announced that the National Health Insurance Fund (NHIF) lacks the capacity to cater for low-cost health insurance policy holders. Prof Nyong’o reports that Kenya currently has over 700,000 low-cost medical insurance policy holders.

Makove, though absent at the time, expressed enthusiasm over the new insurance products targeting low-income earners that had been launched in the recent past. He said that the IRA would continue to create an enabling regulatory environment for the insurance sector’s growth and development.