Kampala- The Insurance Regulatory Authority (IRA) has proposed new guidelines for insurance companies that are looking to offer health services in the country.
Key among the proposals, if agreed upon, will require Health Maintenance Organisations to have a capital investment of Shs500 million and 30 per cent of the working capital.
The Micro-insurance segment will be required to have Shs100 million and Shs4 billion for non-life insurance companies before being registered by IRA.
The regulator also proposes that all health insurance staff be required to have requisite qualifications and experience in offering health services to their clients.
Speaking at a consultative workshop for the draft of micro-insurance regulations, health insurance and membership organisations, IRA chief executive officer Ibrahim Kaddunabi Lubega said the proposed regulations will help streamline health insurance in the country.
“We know that insurance is a business of promise where the insurer promises to protect the insured in case of an eventuality. This promise can only be fulfilled if the insurer has adequate resources to settle claims,” Mr Kaddunabi said.
He emphasised the need for qualified staff saying: “Without staff with the requisite qualifications, companies will not adequately provide protection to policy holders because insurance is a service which has to be underwritten and sold through personnel who understand insurance.”
In the past, there was no agreed upon capital for most health insurance companies and most of the new proposals arise out of amendments to the Insurance Act that seeks to streamline Micro-insurance, Health insurance and Membership Organisations operations.
Ms Mariam Magala, the chief executive officer Uganda Insurers Association, an umbrella body of insurance companies said they are studying the new proposals to see how they will affect the market and also make recommendations.
Mr Kaddunabi said although government scrapped off tax exemptions from insurance players which increases the cost of insurance, it was resolved that micro- insurance is exempted from VAT but a clear definition of micro-insurance in monetary terms is needed.
Recently, Insurance companies that once offered life and non-life insurance as composite businesses were required to have them separated as per the September 2.
Although there are about 22 insurance companies operating in the Ugandan market, it was said that only six offer both life and non-life insurance under the same roof while others either offer life alone or non-life alone. The separation sought to grow the life insurance business which has lagged behind compared to the non-life insurance segment, according to the regulator.
SOURCE: Daily Monitor