The Parliament has passed into law the Insurance Amendment Bill that seeks to regulate the operations of the insurance sector in Uganda.
The Act now prohibits a board member of any insurance firm from serving as a board member of another insurance, brokerage or financial firm.
While debating the bill, the Parliamentary Finance Committee chairperson, Frank Tumwmebaze told parliament that there would be conflict of interest if one person serves on many related boards.
Currently many industry players serve on several insurance, brokerage and financial firms.
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The new Insurance Act also provides for health insurance as one of the classes of non-life insurance businesses regulated under it.
According to the act, no person shall transact business as a health maintenance organization without a valid license.
During the debate legislators raised questions on compensation for third party victims. John Kawanga, the shadow minister of trade and industry, wanted to know how third party victims get compensated.
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Third party road victims have time and again ended up digging into their own pockets to pay their bills yet insurance companies should compensate them for injuries and damages.
Tumwebaze admitted that the committee did not consider the matter . he said the minister of finance can make regulations to mange such an issue.
The Insurance Act act also establishes an insurance appeals tribunal and an insurance policy holders’ compensation fund to be used to compensate policy holders of an insolvent insurer.
The new law also shifts the responsibility of supervising the Insurance Commission from Bank of Uganda to the Minister for Finance.
Offenders will attract a penalty of 10 million shillings. The bill now awaits presidential assent.
