A model regulator of a secure and developed insurance industry

ANYONE CAN INVEST IN INSURANCE

By Alhaj Kaddunabbi Ibrahim Lubega

Reference is made to an article published titled “Over regulation is killing small businesses – expert” that was published in the New Vision of July 1, 2022 on page 24.

In the article, the writer quotes the Makerere University Business School (MUBS) Principal, Prof. Wasswa Balunywa, saying that “people interested in investing in the insurance sector have been closed out on grounds of qualifications and have been denied the license to operate”.

He goes on to say that according to the Insurance Act 2017, only professionals in the sector are allowed to hold high administrative positions, which is also a requirement for license renewal from the regulator.

I would, however, like to clarify on the above statements as follows;

It is true that the Insurance Regulatory Authority of Uganda, as a regulator, requirse people holding technical positions to have professional qualifications for a number of reasons.

Firstly, insurance is a techinal field that requires that whoever is in charge of an insurance entity has the needed technical expertise to ably manage the business and effectively guide his staff on how to manage insurance operations.

Secondly, unlike other industries which have tangible products, insurance sells a promise. Thus the head of the company must be knwoldegable about insurance to be able to run and manage an insurance entity competently and profesionally. With professionalism, we have seen an improvement in confidence and trust levels from the insuring public which has in turn supported insurance  growth in Uganda.

I would, however, like to state that it is UNTRUE that neither the law nor IRA bars people who do not have profesional insurance qualifications from investing in the industry. Anyone, as long as they meet the set minimum requirements is free to invest in the insurance industry.  So there is no law that requires shareholders or board members to be insurance professionals but the manager in charge of the day-to-day operations of an insurance entity  as well as technical staff MUST have profesional qualifications.

We strongly believe that it is government’s duty to protcet the interests of persons who are policyholders/ or beneficiaries. This is done by maintenance of a sound, efficient, fair, transparent and stable Insurance Sector.

Our regulatory environment is guided by the Insurance Core Principles (ICP) developed by the International Association of Insurance Supervisiors (IAIS) which is the International Standrad Setting body for Insurance.

May all of us support this effort as we strive to build a vibrant Insurance Industry in Uganda.

The writer is the Chief Executive Officer at the Insurance Regulatory Authority of Uganda