Published: 1991-07-01
Key Benefits:
Notwithstanding the provisions of any other enactment, in assessing damages in any action, whether commenced before or after the passing of this Act, there shall not be taken into account any sum paid or payable on the death of the deceased under any contract of insurance whether effected before or after the passing of this Act-
(a) effected voluntarily by the deceased person; and
(b) in respect of which the premiums paid were paid by or for the deceased from his personal resources.
104. Insurances to be held with Botswana insurers [vii]*
(1) The Minister may by regulations direct that any or all insurances effected by Botswana residents or Botswana resident companies of such class or classes as he shall direct, shall be placed with Botswana insurers.
(2) Where a class of insurance required to be placed with a Botswana insurer under subsection (1) is not available to a person seeking insurance, such person may place such insurance with a non-resident insurer provided that-
(a) he obtains the prior approval of the Registrar; and
(b) he complies with the provisions of section 105.
(3) Nothing in this section shall affect the requirements of any exchange control law for the time being in force in Botswana.
105. Compulsory local brokerage [viii]*
Any general insurance business policy effected by a Botswana resident or Botswana resident company other than an insurer licensed under this Act with any non-resident insurer shall be effected through the offices of a Botswana licensed broker.
106. Unlimited indemnities prohibited [ix]*
An insurer shall not, on or after a date to be specified by the Minister by regulations, issue or renew a policy of insurance under which the insurer undertakes a liability the amount or maximum amount of which is uncertain at the time when the contract of insurance is entered into or renewed.
107. Commissions only to brokers and agents
No company or individual not a party to any contract of insurance, except an agent or broker licensed under this Act or an employee of an insurer, shall be paid any commission or consideration or thing of value by any Botswana insurer, agent or broker for the effecting or renewing of any policy of insurance subject to the provisions of subsection (3) and subsection (5) of section 96.
108. Time limit on payment of premiums
(1) The Registrar may by notice published in the Gazette and by written notice to each insurer require insurance premiums due to Botswana insurers from Botswana residents, other than another Botswana insurer, to be paid within a specified time from the date the insurance was effected or renewed.
(2) The Registrar may, in any notice issued under subsection (1), specify different times for payment of premiums due from brokers, agents and on insurance business placed directly with the insurer or through the offices of an agent or broker.
(1) No insurer shall extend insurance cover in respect of any policy of insurance effected in the course of its general business beyond a period of 30 days (to be known as the "days of grace"), commencing with the day following the last day of the previous insurance period unless specific instructions have been received prior to or during the days of grace to renew such insurance, and where such instructions are not received the policy cover shall be treated as having lapsed on the last day of the previous insurance period.
(2) Any notice that an insurer shall issue inviting the renewal of any policy shall include a statement indicating the time period during which insurance cover will remain operative prior to receipt of instructions to renew such policy.
The Minister may, by statutory instrument, in the public interest, make an order exempting any insurer, broker or agent from all or any of the provisions of this Act subject to such terms and conditions as he may think fit.
(1) Where an insurer, broker or agent or an applicant for a licence under this Act is required or entitled to do or refrain from doing anything within a specified period of time, the Registrar may at his discretion, on an application in writing by such insurer, broker or agent or applicant, extend such time for a period of not more than three months.
(2) The provisions of this section shall apply notwithstanding that the specified period of time may have expired.
113. Inspection of balance sheet by policyholder, etc.
(1) A policyholder may inspect and shall be entitled to receive one copy of the summary of the latest audited balance sheet of any insurer with whom his policy has been effected.
(2) An insurer shall be entitled to receive a copy of the latest audited accounts of any broker who has an agency agreement with that insurer:
Provided that an insurer shall not divulge any information so received to any person or body of persons and shall take all such action as may be necessary to ensure the confidentiality of the said information.
(3) A person entitled to receive a balance sheet or audited accounts shall be entitled to receive such document without payment of any fee therefor upon application during normal business hours at the principal office of the insurer or broker, as the case may be.
114. Restriction on use of words "insurance" and "assurance"
Any person other than a licensed insurer, broker or agent who uses the words "insurance" or "assurance" or any combination or derivative thereof as part of the business name, style or title of that person shall be guilty of an offence.
115. No advertisement before licensing
(1) No person or body of persons or body corporate shall advertise services requiring a licence under this Act until such licence has been issued to such person, body of persons or body corporate.
(2) Any person, body of persons or body corporate acting in contravention of this section shall be liable to a fine not exceeding P2,000 or to imprisonment for a term not exceeding three months, or to both.
(1) Service of process in any legal proceedings against an insurer licensed under this Act may be effected at the principal office of the insurer in Botswana.
(2) If an insurer has no principal office in Botswana or it has ceased to exist, process in any legal proceedings against the insurer may be served at the office of the Registrar, and service upon the Registrar, in such case, shall be deemed to be service upon the insurer.
117. Enforcement of rights of policyholders
(1) The holder of a policy issued by a Botswana insurer shall, notwithstanding any contrary provision in the policy or in any agreement relating to the policy, be entitled to enforce his rights under the policy against the insurer liable under the policy in any court in Botswana.
(2) Notwithstanding the provisions of subsection (1) a policy issued by a Botswana insurer may provide that the amount of any liability under a policy shall be determined in accordance with the provisions of the Arbitration Act.
122. Inspection of returns to the Registrar
(1) The Registrar may permit any person on payment of the prescribed fee to inspect, make copies or obtain certified copies of any document submitted to him under sections 31 and 63.
(2) No fee shall be paid to the Registrar for information supplied by him to the principal officer in Botswana of a licensed insurer or broker.
124. Continuation of business of insurer in liquidation
(1) The liquidator shall, so far as it may be possible and unless the court otherwise orders, carry on the insurance business of an insurer with a view to being transferred as a going concern to another insurer, whether an existing company or a company formed for the purpose; and, in carrying on that business, the liquidator may agree to the variation of any contracts of insurance in existence when the winding-up order is made but shall not effect any new contracts of insurance.
(2) If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the insurer attributable to its business require the appointment of a special manager of the business, he may apply to the court, and the court may on the application appoint a special manager of that business to act during such time as the court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the court.
(3) The court may require the special manager to give such security as it considers necessary.
(4) The court may make such order as it considers appropriate with regard to the payment of remuneration to the special manager.
(5) The court may, subject to such conditions as it may determine, reduce the amount of the contracts made by an insurer in the course of carrying on his business as an alternative to winding-up or otherwise.
(1) For the purposes of and in consequence of section 123, where the insurance business or any part of the insurance business of an insurer has been transferred to an insurer to which this Act applies under an arrangement in pursuance of which the first-mentioned insurer (in this section called the "secondary company") or the creditors thereof has or have claims against the insurer to which the transfer was made (in this section called the "principal company") then, if the principal company is being wound up by or under the supervision of the court, the court shall, subject to the provisions of this section, order the secondary company to be wound up in conjunction with the principal company and may by the same or any subsequent order appoint the same person to be liquidator for the two insurers and make provision for such other matters as may seem to the court necessary, with a view to the insurers being wound up as if they were one insurer.
(2) The commencement of the winding-up of the principal company shall, except as otherwise ordered by the court, be the commencement of the winding up of the secondary company.
(3) In adjusting the rights and liabilities of the members of the several insurers between themselves, the court shall have regard to the constitution of the insurers, and to the arrangements entered into between the insurers in the same manner as the court has regard to the rights and liabilities of different classes of contributors in the case of the winding-up of a single insurer or as near thereto as circumstances admit.
(4) Where an insurer alleged to be secondary is not in the process of being wound up at the same time as the principal company to which the insurer is secondary, the court shall not direct the secondary company to be wound up unless, after hearing any objections that may be urged by or on behalf of the insurer against being wound up, the court is of the opinion that the insurer is secondary to the principal company and that the winding-up of the insurer in conjunction with the principal company is just and equitable.
(5) An application may be made in relation to the winding-up of a secondary company in conjunction with a principal company by any creditor of, or person interested in, the principal or secondary company.
(6) Where an insurer stands in the relation of a principal company to one insurer, and in the relation of a secondary company to another insurer, or where there are several insurers standing in the relation of secondary companies to one principal company, the court may deal with any number of such companies together or in separate groups, as it thinks most expedient, upon the principles laid down in this section.
(1) No person shall, in any statement, return, report, certificate, balance sheet or other document required by or for the purposes of this Act, wilfully make a statement which is false in any material particular knowing such statement to be false or not believing it to be true.
(2) No person shall, with intent to defraud or deceive-
(a) destroy, mutilate, alter or falsify any books, papers or securities or other record maintained for or by any electronic retrieval system belonging to any insurer, broker or agent; or
(b) make or be a party to the making of any false or fraudulent entry in any register, book of account or other document or other record maintained for or by any electronic retrieval system belonging to any insurer, broker or agent.
(3) Any person who contravenes the provisions of this section shall be guilty of an offence and shall be liable to a fine not exceeding P36,000 or to imprisonment for a term not exceeding two years or to both.
The Registrar may charge such fees in connection with the licensing of insurers, brokers and agents and any other exercise of his functions and the administration of the office of the Registrar under this Act as may be prescribed.
128. Contraventions punishable by regulatory authority
(1) The directors, manager, controller and principal officer of an insurer or a broker acting in contravention of the provisions of section 8, 17 or 25 shall each be liable to a civil penalty not exceeding P10,000 to be imposed by the Regulatory Authority.
(2) Any person carrying on any insurance business without first being licensed as an insurer shall be liable to a civil penalty not exceeding P10,000 to be imposed by the Regulatory Authority, and, where the person contravening this section is a company or partnership, every director, manager, controller and principal officer of the company or every partner, manager, controller or principal officer of the partnership shall each be personally liable as if he was personally responsible for the contravention.
(3) Any person carrying on the business of an insurance agent, broker or agent for a broker without first being licensed as an insurance agent, broker or agent for a broker, as the case may be, shall be liable to a civil penalty not exceeding P3,600 to be imposed by the Regulatory Authority, and, where the person contravening this subsection is a company or a partnership, every director, manager, controller or principal officer of the company or every partner, manager or principal officer of the partnership shall each be personally liable as if he was personally responsible for the contravention.
(4) An insurance agent or agent for a broker acting in contravention of the provisions of section 47 shall, in addition to any offence for which he may be liable under any other law be liable to a civil penalty not exceeding P3,600 to be imposed by the Regulatory Authority.
(5) Any insurer or broker who knowingly employs any person deemed unsuitable by virtue of sections 17 and 51 respectively shall be liable to a civil penalty not exceeding P18,000 to be imposed by the Regulatory Authority.
(6) For the purposes of subsection (5), where the facts which render a particular person unsuitable under those sections are either sufficiently notorious or facts that could have been ascertained very readily, the Registrar may presume that the insurer or broker employed that person knowingly.
(7) The Registrar may treat the non-payment of any civil penalty imposed by him as sufficient reason for cancellation of the licence of any licensed insurer, broker, insurance agent or agent for a broker.
(8) Notwithstanding any other action taken by the Registrar under this Act, any civil penalty imposed by him under the provisions of this section shall be recoverable as a civil penalty imposed by a court under the provisions of subsections (1) to (4) of section 303 of the Criminal Procedure and Evidence Act, and an affidavit sworn by the Registrar shall be sufficient proof of the lawful imposition of the civil penalty to enable the court to issue a warrant under those provisions:
Provided that no warrant shall be issued until any appeal under section 118 has been heard and disposed of or until the time within which an appeal may be made thereunder has expired.
129. Offences punishable by court
(1) Every insurer which-
(a) fails to comply with the provisions of section 27 or 31; or
(b) acts in contravention of the provisions of section 11 or 72,
and every broker who fails to comply with the provisions of section 58 or 63 shall be guilty of an offence.
(2) Every insurer guilty of an offence under this section or under the provisions of section 9, 10 or 71 shall be liable to a fine not exceeding P90,000 and every director, manager, controller and principal officer of any such insurer shall each be personally liable to a fine not exceeding P36,000 or to imprisonment for a term not exceeding two years or to both, unless such director, manager, controller or principal officer can prove to the satisfaction of the court that he was unaware of the default and had taken all reasonable steps to keep himself informed of any possibility of such default.
(3) No prosecution shall be commenced under this section by any person other than the Registrar or by a person authorised in writing by the Registrar.
(1) Every person who acts in contravention of any of the provisions of this Act shall, where no punishment has been stipulated by any other section of this Act for that contravention, be liable to a civil penalty not exceeding P3,600 to be imposed by the Regulatory Authority.
(2) Where an contravention to which this section applies is committed by a body of persons, every director, manager, controller and principal officer of the company and every partner, manager or principal officer of the partnership shall held personally responsible for the contravention:
Provided that if the individual concerned can prove to the satisfaction of the Regulatory Authority that he was not aware of the act or default which contravened the provisions of this Act and could not with reasonable diligence have become aware of it, he shall not be deemed liable under this section.
(3) The provisions of subsection (8) of section 128 shall apply to any civil penalty imposed under this section.
(1) The Minister may, by statutory instrument, make regulations-
(a) prescribing any matter or thing referred to in this Act as prescribed or to be prescribed;
(b) in relation to any other matter or thing authorised or required by this Act to be made or done by or in accordance with regulations; and
(c) generally for the purpose of giving effect to this Act.
(2) Regulations made under this section may make different provisions for different classes of insurers, brokers or agents and insurance business.
(1) This Act applies to every insurer, broker or agent and every class of insurance business other than an insurer, broker or agent or class of insurance business which is exempted from its provisions by a statutory instrument made by the Minister under section 110.
(2) Where an insurer, broker or agent or class of insurance business is exempted by such an instrument from some but not all of the provisions of this Act, the provisions other than the provisions in respect of which the exemption is made shall apply to such insurer, broker or agent or such class of insurance business, as the case may be.
FIRST SCHEDULE
CLASSES OF LONG TERM BUSINESS
Number
Description
Nature of Business
I
Life and annuity
Effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life, but excluding (in each case) contracts within Class III below.
II
Marriage and birth
Effecting and carrying out contracts of insurance to provide a sum on marriage or on the birth of a child, being contracts expressed to be in effect for a period of more than one year.
III
Linked long term
Effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life where the benefits are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contracts) or by reference to fluctuations in, or in an index of, the value of property and any description (whether or not so specified).
IV
Permanent health
Effecting and carrying out contracts of insurance providing specified benefits against risks of persons becoming incapacitated in consequence of sustaining injury as a result of an accident or of an accident of a specified class or of sickness or infirmity, being contracts that-
(a) are expressed to be in effect for a period of not less than five years, or until the normal retirement age for the persons concerned, or without limit of time; and
(b) either are not expressed to be terminable by the insurer, or are expressed to be so terminable only in special circumstances mentioned in the contract.
V
Tontines
Effecting and carrying out tontines.
VI
Capital redemption
Effecting and carrying out contracts of-
(a) capital redemption; or
(b) pure endowment and deferred annuity as defined in the Pensions and Provident Funds Act.
VII
Deposit
Effecting and carrying out-
Administration schemes
(a) contracts to maintain and manage deposit administration policies; or
(b) contracts of the kind mentioned in paragraph (a), that are combined with contracts of insurance covering either conservation of capital or payment of a minimum interest.
SECOND SCHEDULE
CLASSES OF GENERAL BUSINESS
Number
Description
Nature of Business
1
Accident
Effecting and carrying out contracts of insurance and providing fixed pecuniary benefits or benefits in the nature of indemnity (or a combination of both) against risks of the person insured-
(a) sustaining injury as the result of an accident or of an accident of a specified class;
(b) dying as the result of an accident or of an accident of a specified class; or
(c) becoming incapacitated in consequence of disease or of disease of a specified class,
inclusive of contracts relating to industrial injury and occupational disease but exclusive of contracts falling within Class 2 below or within Class IV in the First Schedule to this Act (permanent health).
2
Sickness
Effecting and carrying out contracts of insurance providing fixed pecuniary benefits or benefits in the nature of indemnity (or a combination of the two) against risks of loss to the persons insured attributable to sickness or infirmity, but exclusive of contracts falling within Class IV in the First Schedule to this Act.
3
Land vehicles
Effecting and carrying out contracts of insurance against loss of or damage to vehicles used on land, including motor vehicles, but excluding railway rolling stock.
4
Railway rolling stock
Effecting and carrying out contracts of insurance against loss of or damage to railway rolling stock.
5
Aircraft
Effecting and carrying out contracts of insurance upon aircraft or upon the machinery, tackle, furniture or equipment of aircraft.
6
Ships
Effecting and carrying out contracts of insurance upon vessels used on the sea or inland water, or upon the machinery, tackle, furniture or equipment of such vessels.
7
Goods in transit
Effecting and carrying out contracts of insurance against loss or damage to merchandise, baggage and all other goods in transit, irrespective of the form of transport.
8
Fire and natural forces
Effecting and carrying out contracts of insurance against loss of or damage to property (other than property to which Classes 3 to 7 above relate) due to fire, explosion, storm, natural forces other than storm, nuclear energy or land subsidence.
9
Damage to property
Effecting and carrying out contracts of insurance against loss of or damage to property (other than property to which Classes 3 to 7 above relate) due to hail or frost or to any event (such as theft) other than those mentioned in Class 8 above.
10
Motor vehicle liability
Effecting and carrying out contracts of insurance against damage arising out of or in connection with use of motor vehicles on land, including third party risks and carrier's liability.
11
Aircraft liability
Effecting and carrying out contracts of insurance against damage arising out of or in connection with the use of aircraft, including third party risks and carrier's liability.
12
Liability for ships
Effecting and carrying out contracts of insurance against damage arising out of or in connection with the use of vessels on the sea or on inland water, including third party risks and carrier's liability.
13
General liability
Effecting and carrying out contracts of insurance against risks of the persons insured incurring liabilities to third parties, the risks in question not being risks to which Class 10, 11 or 12 above relates.
14
Credit
Effecting and carrying out contracts of insurance against risks of loss to the persons insured arising from the insolvency of debtors of theirs or from the failure (otherwise than through insolvency) of debtors of theirs to pay their debts when due.
15
Suretyship
Effecting and carrying out-
(a) contracts of insurance against risks of loss to the persons insured arising from their having to perform contracts of guarantee entered into by them;
(b) contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or custom bonds or similar contracts of guarantee.
16
Miscellaneous financial loss
Effecting and carrying out contracts of insurance against any of the following risks, namely-
(a) risks of loss to the persons insured attributable to interruptions of the carrying on of business carried on by them or to reduction of the scope of business so carried on;
(b) risks of loss to the persons insured attributable to their incurring unforeseen expense;
(c) risks neither falling within paragraph (a) or (b) above nor being of a kind such that the carrying on of the business of effecting and carrying out contracts of insurance against them constitutes the carrying on of insurance business of some other class.
17
Legal expenses
Effecting and carrying out of contracts of insurance against risks of loss to the persons insured attributable to their incurring legal expenses (including costs of litigation).
[i] Date of commencement of section 47: 1st July, 1991.
[ii] Date of commencement of section 52: 1st July, 1991.
[iii] Date of commencement of section 54: 1st July, 1992.
[iv] Date of commencement of subsection (2): 1st July, 1991.
[v] Date of commencement of subsection (3): 1st July, 1991.
[vi] Date of commencement of subsection (4): 1st July, 1991.
[vii] Date of commencement of section 104: 22nd January, 2008.
[viii] Date of commencement of section 105: 1st July, 1991.
[ix] Date of commencement of section 106: 22nd January, 2008.