The object of the Bill is to provide a new Insurance Industry Act to provide for all the provisions of the insurance industry under one Act, including the incorporation of the provisions relating to the industry from the Non-Bank Financial Institutions Regulatory Authority Act.
The provisions of the new Bill mainly provide more comprehensive rules for the insurance industry dealing with insurance business of insurers, brokers, agents and representatives.
However, Part VII includes certain provisions that are relevant to policyholders. Two of these provisions relate to exclusion of certain clauses in a policy and issues around the payment of premiums.
For instance, the Bill sets out certain clauses in an insurance policy that shall be void if the purpose of the clause is:
The Bill also sets out comprehensive provisions concerning payment of premium and where the insurer is liable or not liable. In other words, where an insurer provides a policy, it will be suspended until the insurer has received the first or only premium or being provided with an undertaking for payment which the insurance company accepts.
Where a premium is received on behalf of the insurer by a person authorised by the insurer it will be deemed to be paid to the insurer at the time it is paid to the insurer's representative. A grace period is also provided for, where a premium is not paid on due date, the policy will remain in force for a minimum period of 30 days or for such longer period as an insurer may determine.
Any invitation for a renewal of any policy by the insurer shall include a statement indicating the time period during which an insurance cover will remain operative prior to receipt of instructions to renew the policy. Where a premium is not paid by the end of the grace period, the general insurance policy will be deemed to have lapsed on the last day of the previous insurance period.
However, there is an obligation on the insurer to notify a policy holder at least 15 days prior to the lapse of a policy.
