Digest of the Regulation on the sanctions of the insurers

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REGULATORY DIGEST-REGULATION No 48/2022 OF 02/06/2022 ON ADMINISTRATIVE AND PECUNIARY SANCTIONS APPLICABLE TO INSURERS

  1.   Background

Following the newly enacted Insurance law, the above regulation was reviewed in the preamble to refer to the new laws. It reviewed and repealed Regulation n° of the National Bank of Rwanda n° 03/2017 of 22/02/2017 on administrative and pecuniary sanctions applicable to insurerswhen a private insurer fails to comply with the provisions of the Law governing insurance business or its implementing regulations, directives, and decisions of the Supervisory Authority.

  1.   Regulatory Key highlights

Disciplinary measures applicable to an insurer: Article 3 provides for corrective measures, including written warning, permanent or temporary prohibition from conducting certain activities of insurance business, suspension of all assistance from the Supervisory Authority, prohibition from declaring or paying dividends, and revocation of license.

Grounds and effects of revocation of license: The revocation occurs if the private insurer  has not commenced insurance business within six months, has obtained the license through incorrect statements or fraudulent means, its parent company is undergoing liquidation, it is involved in money laundering and financing terrorism activities, or for any conduct that may jeopardize the reputation of the financial sector.

Sanctions applicable to managers and directors: Supervisory authority may request the suspension or dismissal of a director or a Senior Manager of a private insurer or public insurer in case it determines that he or she has infringed the Law governing insurance business or its implementing regulations, directives, and decisions. But the Supervisory authority also has the power to suspend or dismiss the said persons as per Article 5 (2).

Pecuniary sanctions: The nature of the violation and its corresponding sanction are annexed to the regulation.

  1.   Implications for concerned stakeholders

Any private insurer or a public insurer must comply with provisions of the Law governing the insurance business or its implementing regulations instructions, directives, and decisions of the Central Bank to avoid regulatory sanctions for their violations as per Articles 5 and 6 of this Regulation.

To read the whole Regulation, please visithttps://www.bnr.rw/laws-and-regulations/insurance-and-pension/insurance-laws-regulations/