An evaluation of the effectiveness of state regulation of the insurance industry in Kenya

The insurance industry in Kenya has been neglected by successive governments in terms \nof reform and development. This stems from the colonial period when the colonial \ngovernment established a solid banking foundation in Kenya to serve the settlers while it \nsourced all the insurance they needed from overseas. Over the years the industry has been \non the news for reasons such as ethics, company collapse, insolvency, liquidation, court \nbattles, fraud and mystery in its nature and operations. The regulatory regime seems to be \ninvisible and yet there is an Insurance Act, offices and organizations set up by the Act to \noversee the industry. \nRegulating this industry is of immense importance and crucial for its survival. It is \nthrough regulation that the industry may deal with ethical issues, economic downturns, \nwinding up, insolvency, liquidation, political interference and increased rivalry between \nplayers. An effective and sound regulatory and supervisory system is necessary to protect \npolicy holders, to maintain an efficient, safe, fair and stable insurance market that \npromotes growth and competition in the sector. There has been a general perception that \nthe state isn’t doing enough about the state of the industry at the expense of innocent \npolicy holders. This research therefore, sought to analyze the extent to which the state has \nsucceeded in regulating the insurance industry in Kenya and to establish the factors that \naffect effective regulation of the insurance industry in Kenya