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28 Apr 2020

NO MORE ISSUANCE OF BONUSES AND DISTRIBUTION OF DIVIDENDS TO SHAREHOLDERS – IRA

The Insurance Regulatory Authority of Uganda (IRA) takes cognizance of the impact of the COVID-19 pandemic on the insurance industry given the high likelihood of increased default in premium payments by policyholders and increased payouts by insurers and HMOs as a result of mortality of assured persons and payments towards medical treatment among others.

In order to address the challenge of default in premium payment by insured members of the public due to the current unprecedented challenges arising from the COVID-19 pandemic, the Authority advises that the grace period for lapsation of life policies be extended by an ADDITIONAL 90 days whilst that for medical insurance and non life policies under the premium installment payment warranty be extended by an ADDITIONAL 60 days.

Also, in order to ensure that insurers and HMOs maintain adequate capital resources commensurate to their insurance business and risk profile, the Authority in exercise of its powers prescribed by S. 121(1) of the Insurance Act 2017 hereby directs that save for Deposit Administration Plans and for profit policies, no insurer or HMO shall issue bonuses or engage in any distribution including payment of dividends to shareholders and other persons unless permitted by the Authority.

This directive shall remain in force until the Authority advises otherwise.