Kenya’s New Insurance (Amendment) Bill, 2025 Tough Penalties Against Discrimination in the Insurance Sector

The Kenyan insurance industry is on the brink of a significant transformation with the introduction of the Insurance (Amendment) Bill, 2025, aimed at eliminating discriminatory practices by insurers. This landmark legislation seeks to protect vulnerable groups—including women, the elderly, and people with chronic illnesses—from unfair treatment in accessing insurance services. The Bill proposes strict penalties, including fines of up to KSh 5 million, jail terms of up to five years, and even deregistration of offending companies.

This article provides a comprehensive overview of the Bill’s provisions, its implications for the insurance sector, and how it aligns with Kenya’s constitutional guarantees of equality and social security.

Background: Discrimination in Kenya’s Insurance Sector

Discrimination in insurance—whether based on age, gender, health status, race, or other personal characteristics—has long been a concern in Kenya. Vulnerable groups often face barriers such as:

• Higher premiums or outright denial of coverage
• Exclusion from certain insurance products
• Biased underwriting practices

Such discrimination not only violates ethical standards but also undermines social equity and access to essential financial protection.

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Key Provisions of the Insurance (Amendment) Bill, 2025

1. Prohibition of Discriminatory Practices

The Bill explicitly makes it illegal for insurers, brokers, agents, and other industry personnel to discriminate against individuals based on:

• Race
• Gender
• Age
• Health status (including chronic illnesses)
• Disability
• Other personal characteristics

This prohibition covers all aspects of insurance services, including underwriting, pricing, claims handling, and marketing.

2. Strict Penalties for Offenders

Individuals and companies found guilty of discriminatory conduct face severe consequences:

• Fines of up to KSh 5 million (approx. $38,650)
• Jail terms of up to five years, or both fines and imprisonment
• Deregistration or cancellation of operating licenses for corporate offenders
• Appointment of a manager to oversee the company in cases of deregistration

These penalties are designed to deter biased behavior and hold offenders fully accountable.

3. Personal Liability of Senior Executives

The Bill holds senior executives—including directors and managers—personally liable for discriminatory practices unless they can prove:

• They were unaware of the offense, and
• They took adequate measures to prevent it

This provision ensures that leadership cannot evade responsibility and encourages proactive compliance.

Constitutional Foundations of the Bill

The Bill draws heavily on Kenya’s Constitution, particularly:

• Article 27(4): Prohibits discrimination on grounds such as race, sex, age, disability, and health status
• Article 43: Guarantees every person’s right to social security, including access to insurance

Senator Okong’o Omogeni, the Bill’s sponsor, emphasized that the legislation seeks to uphold these constitutional rights by promoting equality and social protection within the insurance sector.

Why the Bill Is Timely and Necessary

• Rising Complaints: Over 500 complaints against insurers were reported in the first quarter of 2024 alone, many related to discriminatory practices
• Growing Insurance Market: Kenya’s insurance sector is projected to reach $8.03 billion in premiums by the end of 2025, increasing the need for fair and inclusive practices
• Social Equity: Vulnerable groups must not be excluded from financial protection, which is crucial for economic empowerment and poverty reduction

Implications for the Insurance Industry

For Insurance Companies

• Must review and revise underwriting guidelines and pricing models to ensure fairness
• Need to implement training and compliance programs to prevent discriminatory conduct
• Risk losing licenses and facing regulatory sanctions if found non-compliant

For Industry Personnel

• Agents, brokers, and underwriters must adhere strictly to non-discrimination policies
• Could face personal fines and imprisonment for violations

For Consumers

• Improved access to insurance products regardless of age, gender, or health status
• Greater confidence in the fairness and transparency of the insurance market

Enforcement and Oversight

The Insurance Regulatory Authority (IRA) and Kenya Revenue Authority (KRA) will play key roles in enforcing the Bill’s provisions. This includes:

• Monitoring insurer practices
• Investigating complaints of discrimination
• Imposing penalties and sanctions

The Bill also empowers courts and regulatory tribunals to adjudicate cases swiftly, reinforcing accountability.

Conclusion

The Insurance (Amendment) Bill, 2025 marks a pivotal step toward an inclusive, fair, and accountable insurance sector in Kenya. By outlawing discriminatory practices and imposing stringent penalties, the Bill protects vulnerable groups and aligns the industry with Kenya’s constitutional values.

For insurers, brokers, and agents, this is a call to embrace fairness and transparency. For consumers, it promises enhanced access to vital insurance services, ensuring that no Kenyan is left behind due to bias.

As the Bill awaits its first reading in the Senate, stakeholders across the insurance landscape must prepare to adapt and uphold these new standards—building a stronger, more equitable insurance market for all Kenyans.