Kenya Deregisters 20 Insurance Brokers in Major Compliance Clean-Up

What Happened: Broker Licences Cancelled

The Insurance Regulatory Authority (IRA) of Kenya recently took decisive action by cancelling the licences of 20 insurance brokerage firms. The change was officially communicated via a Kenya Gazette notice on 18 July 2025, and it states that the affected brokers ceased transacting insurance business as of 30 June 2025, under Section 196(A) of the Insurance Act (Cap 487). (kenyanwallstreet.com)

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Commissioner of Insurance Godfrey Kiptum emphasized that these brokers failed to meet statutory requirements, including failure to remit premiums, inadequate capitalisation, and failure to renew licences. (kenyanwallstreet.com)

Names of Affected Brokers

The full list includes:

1. African Continent Insurance Brokers Ltd
   
2. Andalus Insurance Brokers Ltd
   
3. Allied Insurance Brokers Ltd
   
4. Alpha-Levits Insurance Brokers Ltd
   
5. Arkchoice Insurance Brokers Ltd
   
6. Berkley Insurance Brokers Ltd
   
7. Bilan Insurance Brokers Ltd
   
8. Blossom Insurance Brokers Ltd
   
9. Fides Insurance Brokers Ltd
   
10. Harbinger Insurance Brokers Ltd
    
11. Homeland Insurance Brokers Ltd
    
12. Ibsa Insurance Brokers Ltd
    
13. Khushal Insurance Brokers Ltd
    
14. Legacy Insurance Brokers Ltd
    
15. Masumali Meghji Insurance Brokers Ltd
    
16. Nexus Insurance Brokers Ltd
    
17. Online Insurance Brokers Ltd
    
18. Real Alliance Insurance Brokers Ltd
    
19. Solian Insurance Brokers Ltd
    
20. Swinton Insurance Brokers (K) Ltd (kenyans.co.ke)
    

Why the IRA Took Action: Core Compliance Failures

The regulator’s audit identified multiple serious breaches:

• Non-remittance of premiums to underwriters, a critical breach as brokers often collect premiums from policyholders but must pass them to insurance companies. (The Eastleigh Voice News)
  
• Failure to renew operational licences, meaning some brokers were operating without valid registration. (kenyanwallstreet.com)
  
• Inadequate capitalisation, which means the brokers did not maintain the minimum financial reserves or net worth required by law. (kenyanwallstreet.com)
  
• Some brokers were dormant — they had ceased business activities, rendering their licence inactive. (Nation Africa)
  

Legal Framework: Section 196(A) of the Insurance Act

Section 196(A) of the Insurance Act (Cap 487) empowers the IRA to deregister brokers/intermediaries under certain conditions: non-compliance with licensing standards, failing to meet regulatory or financial obligations, or not fulfilling other statutory requirements. Once deregistered, firms must immediately cease transacting insurance business. (The Eastleigh Voice News)

The issuance of the Gazette Notice is a legal requirement to ensure transparency and public awareness of the deregistration. (People Daily)

Broader Regulatory & Sectoral Context

AML/CFT Pressures and Sector Reviews

The crackdown coincides with broader efforts by the IRA to strengthen the insurance sector’s alignment with anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. Long-term and life insurance products have been flagged as particularly vulnerable, especially where premium payments, policy cancellations or surrenders can be manipulated to launder funds. (The Eastleigh Voice News)

Kenya’s listing as a high-risk jurisdiction by the European Commission in June 2025 added urgency to reforms. The country faces extra international scrutiny in financial transactions, which has implications for compliance cost, foreign investment credibility, and correspondent banking relationships. (The Eastleigh Voice News)

Historical Precedents

This is not the first time the IRA has taken steps to deregister brokers. In 2022, approximately 38 brokers lost licences for issues including late premium remittances, non-compliance or inactivity. This underscores a pattern of enforcement cycles aimed at cleaning up the brokerage space. (Nation Africa)

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Implications for Stakeholders

For Insurance Policyholders

• Individuals and businesses must verify whether their broker is still licensed before renewing policies or making claims. The IRA has warned the public not to transact business with deregistered brokers. (kenyanwallstreet.com)
  
• Premiums paid to unlicensed brokers may not be recoverable or recognized by insurers.
  

For Brokerage Firms & Agents

• Brokers must ensure compliance with capital requirements, licence renewals, premium remittances, submission of audited financial statements, and maintain active operations.
  
• Agents within deregistered firms may lose income and reputation; they need to move to compliant entities or risk being excluded.
  

For Insurers, Regulators, and the Economy

• Insurers depend on brokers for client acquisition and premium collection; removal of non-compliant brokers may force insurers to re-assess distribution networks.
  
• The IRA aims to strengthen consumer protection and trust in the sector; compliance removes weak players and may reduce malpractice.
  
• Strong regulatory enforcement may improve Kenya’s standing with global bodies like FATF, EU regulators, and international investors.
  

Effects Already Visible or Expected

• The public is being urged to always check broker licensing status via official IRA resources, e.g. the licensed intermediaries register maintained by the regulator. (kenyanwallstreet.com)
  
• The crackdown has driven awareness of regulatory risk among brokers; many are likely reviewing their compliance status to avoid similar outcomes.
  
• It might also reduce insurance penetration temporarily in areas served by the deregistered brokers, especially if replacement brokers aren’t immediately available.
  

Remaining Questions & Challenges

While this is a strong regulatory signal, there are several issues that will determine how effective the intervention is:

1. Transparency in specific reasons for each broker: The notices often aggregate failures without naming which broker failed on which ground, making it harder for public accountability or for brokers to learn from mistakes.
   
2. Ensuring due process and appeal: Under Section 196(A), affected brokers may appeal or apply to be reinstated if they comply. How accessible that process is can affect perceptions of fairness.
   
3. Capacity of IRA enforcement: Investigative, supervisory, legal capacities are critical. Ensuring complaints or compliance breaches are followed by robust action (prosecution where necessary) is part of credibility.
   
4. Balancing regulatory strictness with access: Over-stringent rules could hurt small brokers who may struggle with capital or administrative burdens; policy may need to support capacity building in such cases.
   
5. Monitoring whether deregistration reduces malpractice/fraud in reality: The primary goal is consumer protection — fewer unauthorised or unscrupulous brokers, fewer mis-sales, fewer premium losses, less money laundering risk.
   

Supporting Sources & Verified Data

• The Kenya Gazette notice of 18 July 2025 confirms the deregistration of 20 brokers under Section 196(A). (People Daily)
  
• Multiple media outlets (including Kenyan Wall Street, Nation Africa, People Daily) report the same list of brokers and broadly similar reasons (non-compliance, dormancy, licence lapses). (kenyanwallstreet.com)
  
• IRA’s sector-wide audit & statements by the Commissioner of Insurance, Godfrey Kiptum, emphasize strengthened governance standards in line with AML/CFT and financial reporting frameworks. (kenyanwallstreet.com)
  

Broader Significance

• This deregistration is part of a larger push to clean up financial intermediaries in Kenya. It complements other regulatory interventions such as the Insurance Professionals Act and recently strengthened AML/CFT laws.
  
• It helps address past criticisms that Kenya’s financial services sector had weak oversight of intermediaries (brokers, agents), particularly concerning unremitted premiums and poor transparency.
  
• Internationally, regulators often look at brokerage intermediary registration, auditing, capital strength, and premium handling when evaluating a jurisdiction’s trustworthiness in insurance and financial services.
  

What to Watch Next

• Whether the deregistered brokers appeal their status successfully or meet compliance to get reinstated.
  
• Whether insurance premiums change—either for better or worse—as distribution channels shift away from brokers who once served certain markets.
  
• How many new brokers emerge to fill gaps created, or whether existing compliant brokers absorb those portfolios.
  
• The impact on AML/CFT ratings, including whether Kenya makes progress toward removal from any international lists (e.g. FATF grey list).
  
• Whether similar enforcement actions follow in adjacent categories (agents, reinsurers, financial institutions).
  

Conclusion

Kenya’s decision to deregister 20 insurance brokers is a strong statement about enforcing regulatory compliance in the insurance sector. By acting under Section 196(A) of the Insurance Act, the IRA has targeted brokers who were dormant, undercapitalised, or failing basic obligations like remitting premiums or renewing licences.

This move has implications for policyholders, insurers, and the overall financial system. It reflects Kenya’s ongoing efforts to strengthen governance, align with AML/CFT international norms, and safeguard the trust and integrity of the insurance sector.

However, the success of this crackdown will hinge on enforcement, transparency regarding reasons for individual deregistrations, and ensuring that compliance becomes the norm rather than a compliance exercise.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

21st July, 2025