Parliament recently passed the Insurance Act, 2021 (Act 1061) to replace the Insurance Act, 2006 (Act 724) and to provide for the regulation and supervision of the insurance market. Act 1061 creates three main licence categories under which insurance businesses may operate: Insurance Licence, Reinsurance Licence and the new Innovative Insurance Licence.
The Act allows a foreign insurer that is not licensed to operate in Ghana to open a contact office in Ghana, subject to approval and any other conditions imposed by the National Insurance Commission (NIC). The NIC may grant approval for a person to enter into a contract with a foreign insurer if no local insurer has the capacity to insure the risk covered under the insurance contract, or if no licenced insurer is willing to insure the risk covered under the insurance contract.
The new Insurance Act requires a licensed insurer or reinsurer to obtain prior approval from the NIC for a person to become a significant owner of that company, for an increase or reduction in the level of control a significant owner has in the company, or for a person to cease to be a significant owner of the company. In addition, a licensed insurer or reinsurer may appoint a director, senior manager or key person in a control function only with the prior written approval of the NIC.
Act 1061 also creates an Insurance Education Fund and an Agricultural Insurance Fund to provide financial support to the Ghana Insurance College for training persons in the insurance industry, and to provide financial resources to subsidize agricultural insurance premiums amongst other things, respectively. It is expected that the passage and implementation of this Act will increase insurance penetration in Ghana.
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