Unlicensed financial organizations, corporations, and people who serve as intermediaries for insurance firms are subject to a prison sentence of two years or longer, whichever comes first.
The National Insurance Commission (NIC) has emphasized that violating section 109 of the new Insurance Act, 2021 entails acting as an intermediary for insurance companies (Act 1061).
Additionally, it specified that these institutions would be required to pay the Commission an administrative fine of between 2,500 and 10,000 penalty units if they were detained.
The Commission has therefore cautioned banks and financial institutions without a license against the act.
In a public notice according to graphic online reports, these institutions have been asked to stop soliciting fees, commissions, and or other remuneration from insurance companies in exchange for referring clients, customers, or any other person whether individual or corporate to the insurer.
“It has also asked them to desist from soliciting insurance business for the insurer, inviting another person or causing that person to be invited as a customer through an advertisement or otherwise; performing any other function of an agent assigned to that person by the insurer; and the performance of any other function with respect to insurance,” the report noted.