Published: 1991-07-01
Key Benefits:
ARRANGEMENT OF SECTIONS
SECTION
PART I
Preliminary
1. Short title
2. Interpretation
PART II
3. - 4. ......
PART III
Capital and other Requirements for Insurers other than
Associations of Underwriters
5. Application of Part III
6. Insurer to be a resident company
7. Restrictions on general and long term insurers
8. Separation of insurers and brokers
9. Capital requirement
10. Margin of solvency
11. Statutory Reserve Solvency Account
PART IV
Provisions governing Insurers other than Associations of Underwriters
12. Application of Part IV
13. Licensing of an insurer
14. Exclusion of burial societies
15. ......
16. Licensing requirements
16A. Renewal of licence of an insurer
17. Restriction on insurers whose officers are deemed unsuitable
18. Grant of application
19. - 22. ......
23. Retentions and reinsurances
24. ......
25. Preservation of records
26. Amendment of accounts, etc.
27. Audit of accounts of insurers
28. Registrar's powers re commissions, deposit of funds and management expenses
29. Valuation of assets and liabilities
30. Change of financial year
31. Annual returns to the Registrar
32. Publication of authorised capital
33. Powers re restriction and instruction on insurers
34. Trusteeship of assets
35. Preferred creditors of an insurer
36. Insurers' code of practice
37. Classification
PART V
Association of Underwriters Licensed as Insurers
38. Application of Part V
39. Registrar to determine conditions for licensing
40. Association of underwriters to deposit sums or securities
41. Premiums received to be held in trust
42. Audit of accounts of an association of underwriters
PART VI
Third Party (Rights against Insurers)
43. Third party rights against insurers on bankruptcy, etc. of the insured
44. Duty to give necessary information to third parties
45. Settlement between insurers and insured persons
PART VII
Licensing Requirements of Insurance Brokers, Insurance Agents
and Agents for Brokers
46. Insurance brokers, agents and agents for brokers to be licensed
47. Agents to act for one principal only
48. Insurer's and broker's responsibility for agents
49. Licensing of agents
49A. Renewal of licence of an agent
50. ......
51. Restriction on broker's officers
52. Licensing requirements of insurance brokers
52A. Renewal of licence of an insurance broker
53. Grant of broker's application
54. Broker's capital requirements
55. Broker's responsibilities and insurance requirements
56. Broker's records and rights of access
57. Broker's responsibility for premiums
58. Broker's accounts
59. Cancellation of licence
60. ......
61. Financial year end of broker
62. Broker's amalgamations, sales and transfers
63. Broker's annual returns to the Registrar
64. Insurance brokers' code of conduct
PART VIII
Special Provisions relating to Long Term (Life) and
other Policies
65. Life insurance tables
66. Insurable interest essential for all policies
67. - 68. ......
69. Periodic actuarial investigations
70. Establishment of statutory life insurance fund
71. Application of assets of insurer with long term business
72. Restriction on transaction with connected persons
73. Exemption: Botswana Development Corporation
74. Reinsurance contracts of long term insurers
75. Allocations to policyholders
76. Investment unit policies
77. Life insurance of minors
78. Value of certain assets
79. Life policy effected by married persons
80. Life policy on own life: protection afforded during life
81. Life policy on own life: protection afforded on death
82. Protection afforded in respect of life policy inuring to spouse or children
83. Protection afforded in respect of life policy inuring to wife
84. Special provisions relating to persons married in community of property
85. Selection for realisation of life policies in respect of which protection is afforded
86. Partial realisation and partial conversion of life policies
87. Provisions in case premium on life policy ceded or trust policy cannot be maintained
88. Life policy ceded or premium paid with intent to benefit someone at the expense of a creditor
89. Power to pay into court
90. No deductions in respect of other life policies
91. Proof of age
92. Age incorrectly stated
93. Suicide
94. Lost or destroyed life policy
95. Life policy may include subsidiary benefits
96. Discrimination between life policies, etc. prohibited
97. Non-forfeiture of life policies in certain cases of non-payment of premiums
98. Paid-up policies
99. Surrender of policies
100. Cancellation of life policy within limited period without penalty
101. Publication of bonus rates and unit values
102. Advertisements and projected benefits
PART IX
Miscellaneous Provisions
103. Fatal accidents
104. Insurances to be held with Botswana insurers
105. Compulsory local brokerage
106. Unlimited indemnities prohibited
107. Commissions only to brokers and agents
108. Time limit on payment of premiums
109. Days of grace
110. Exemption
111. Extension of time
112. ......
113. Inspection of balance sheet by policyholder, etc.
114. Restriction on use of words "insurance" and "assurance"
115. No advertisement before licensing
116. Service of process
117. Enforcement of rights of policyholders
118. - 121. ......
122. Inspection of returns to the Registrar
123. ......
124. Continuation of business of insurer in liquidation
125. Secondary companies
126. False documents
127. Fees
128. Contraventions punisable by regulatory authority
129. Offences punishable by court
130. General penalty
131. Regulations
132. Application of Act
First Schedule - Classes of Long Term Business
Second Schedule - Classes of General Business
Act 21, 1987,
S.I. 120, 1990,
Act 17, 2003,
Act 2, 2007,
S.I. 11, 2008.
An Act to make provision relating to the carrying on of insurance business and other matters connected therewith.
[Date of Commencement:
ss 47, 52, 57(2), (3) and (4), and 105: 1st July, 1991;
s 54: 1st July, 1992;
the rest of the Act, except ss 104 and 106: 1st July, 1990;
ss 104 and 106: 22nd January, 2008]
This Act may be cited as the Insurance Industry Act.
In this Act, unless the context otherwise requires-
"actuary" means-
(a) a fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland; or
(b) such other person having actuarial knowledge as the Registrar may approve;
"agent" means the same as "insurance agent" herein described;
"agent for broker" means a person who transacts insurance business on behalf of a registered insurance broker;
"approved securities" means securities issued by the Government and such other securities or investments as the Registrar may approve;
"associate", in relation to an applicant for licensing as an insurer or broker includes-
(a) the spouse or minor son or daughter of that person;
(b) any company of which that person is a director;
(c) any person who is an employee or partner of that person; or
(d) if that person is a company-
(i) any director of that company;
(ii) any subsidiary of that company;
(iii) any director or employee of any such subsidiary;
"association of underwriters" means underwriters at Lloyd's of London;
"broker" means the same as "insurance broker" herein described;
"chairman", in relation to an association of persons, includes the individual presiding over the board of directors or other governing body of the association;
"child" includes an illegitimate child, stepchild or a child adopted in accordance with the Adoption of Children Act, or in accordance with any enactment whatsoever, whether within or outside Botswana, relating to the adoption of children;
"contingent obligation dependent on a human life" means-
(a) an obligation to pay to a particular person certain sums of money or to provide for a particular person certain other benefits-
(i) on the occurrence of death of a particular person or the birth of a child to a particular person at any time or within a specified period; or
(ii) in the event of a particular person continuing to live throughout a specified period; or
(b) an obligation assumed-
(i) until the death of a particular person; or
(ii) during a specified period or until the occurrence of the death of a particular person before the expiration of that period;
"controller", in relation to an applicant for licensing as an insurer or broker, means-
(a) a Managing Director or Chief Executive of the applicant or of a body corporate of which the applicant is a subsidiary; or
(b) a person in accordance with whose directions or instructions the directors of the applicant or of a body corporate of which the applicant is a subsidiary are accustomed to act; or
(c) a person who either alone or with an associate or associates is entitled to exercise, or control the exercise of, one-third or more of the votes at any general meeting of the applicant or of any body corporate of which the applicant is a subsidiary;
"controller", of a person or body corporate, other than in relation to an applicant for licensing as an insurer or broker means-
(a) a Managing Director or Chief Executive of a body corporate which is a subsidiary of the person or body corporate;
(b) a person in accordance with whose directions or instructions the directors of a body corporate which is a subsidiary of the person or body corporate are accustomed to act; or
(c) a person who either alone or with an associate or associates is entitled to exercise, or control the exercise of, 15 per cent or more of the votes at any general meeting of, or of a subsidiary of, a person or body corporate;
"dependant", in relation to any person, includes his surviving spouse and any parent, child and grandchild of his;
"deposit" means a deposit of money or anything having a monetary value which by virtue of the regulations made under this Act may be accepted as a deposit;
"deposit administration policies" means a contract whereby-
(a) an insurer maintains a fund to which-
(i) is credited all amounts paid by the insured to the fund; and
(ii) is debited all amounts withdrawn from the fund to provide benefits in terms of the rules of the fund and such administrative and other expenses as are agreed upon between the insured and the insurer from time to time; and
(iii) such investment income and capital profits or losses as are agreed upon between the insured and the insurer as being for the account of the fund; and
(b) the liability of the insurer to the insured, at any given time, is limited to the amount standing to the credit of the fund;
"director" includes an individual occupying the position of director or alternate director of an association of persons or a member or alternate member of a committee of management or of any other governing body of an association of persons, by whatever name he may be called;
"financial year", in relation to an insurer, means each period of 12 months at the end of which the balance of the accounts is struck, and includes any lesser or greater periods as the Registrar shall approve;
"friendly society" means an association of persons established with no share capital for the purpose of aiding its members or their dependants, where such association does not employ any person whose main occupation is the canvassing of other persons to become members of the association or the collecting of contributions or subscriptions from its members towards the funds of the association;
"funeral policy" means a policy whereby the insurer assumes, in return for a premium or the promise of a premium, an obligation to provide, on the death of any person, benefits, not exceeding in value such amount as may be prescribed, which consist principally of provision for the funeral of that person or the grant to another person of some non-monetary benefit, whether or not the policy provides for-
(a) the payment at the option of the insurer or any other person of a sum of money instead of provision of a funeral or the grant of a non-monetary benefit; or
(b) the payment of a sum of money in addition to the provision of a funeral or the grant of some non-monetary benefit;
"general business" has the meaning assigned to it under section 37;
"gross profit" means the chargeable income of the insurer as ascertained under Part VI of the Income Tax Act;
"insolvency" has the meaning assigned to it by the Insolvency Act;
"insurance agent" means a person who solicits applications for insurance, collects moneys by way of premiums and acting in accordance with his agency agreement may bind the licensed insurer for whom he acts in the issue of insurance cover;
"insurance broker" means persons, who acting with complete freedom as to their choice of undertaking, and for commission or other compensation and not being an agent of the insurer, bring together, with a view to the insurance or reinsurance of risks, persons seeking insurance or reinsurance and insurance or reinsurance undertakings, carry out work preparatory to the conclusion of contracts of insurance or reinsurance, and, where appropriate, assist in the administration and performance of such contracts, in particular in the event of a claim;
"insurance business" includes assurance and reinsurance;
"insurer" means a person carrying on an insurance business, otherwise than as a broker or agent, and includes an association of underwriters;
"life insurance business" means the business of assuming the obligations of an insurer classified under section 37 as transacting long term business;
"life insurance fund" means the fund established under section 70 to which the receipts of an insurer in respect of his life insurance business are carried;
"life policy" means any contract of insurance made or agreed to be made by an insurer classified under section 37 as transacting long term business;
"long term business" has the meaning assigned to it under section 37;
"management expenses" means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not incurred in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;
"manager", in relation to an applicant for licensing as an insurer or broker includes an employee of the applicant (other than a controller), who, under the immediate authority of a director or chief executive of the applicant exercises managerial functions or is responsible for maintaining accounts or other records of the applicant not exclusively related to business conducted from a place of business outside Botswana;
"member of the insurance industry" includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settlement agent, whether licensed under this Act or not;
"minor" means a person who, by reason of his youth, is under a legal disability;
"owner", in relation to a policy, means the person who for the time being has the legal title to the policy;
"policy" includes every writing whereby any contract of insurance is made or agreed to be made;
"prescribed" means prescribed by regulations made under section 131;
"principal officer" means the person for the time being serving one principal officer and being responsible for the daily management of the principal officer in Botswana of the insurer, broker or agent;
"Registrar" means the Regulatory Authority established under the Non-Bank Financial Institutions Regulatory Authority Act;
"stock insurance company" means an insurance company with permanent share capital owned and controlled by its shareholders and includes a statutory corporation carrying on insurance business;
"trustee", in relation to an estate in insolvency, includes an assignee or, as the case may be, a trustee in a deed of arrangement of the person having the conduct of an order of composition;
"underwriter" includes any person named in a policy or other contract of insurance as liable to pay or contribute towards the payment of the sum secured by the policy or contract;
"underwriter's liabilities", in relation to a member of an association of underwriters, means the liabilities of the insurance business of the member calculated in accordance with formulae fixed by the responsible body at Lloyds of London vested with the administration of the relevant insurance law.
