The Role of the Insurance Regulatory Authority of Uganda in Regulating the Insurance Industry

TABLE OF CONTENT

DECLARATION ............................................................................................................................. i

APPROVAL ................................................................................................................................... ii

DEDICATION ............................................................................................................................... iii

AKNOWLEDGEMENTS .............................................................................................................. iv

LIST OF ABREVIATIONS AND ACRCRONYMS ..................................................................... v

GLOSSARY OF INSURANCE TERMS ........................................................................ .............. vi

TABLE OF CONTENT ................................................................................................................. ix

ABSTRACT ........................................................................... ...................................................... xiii

CHAPTER ONE ........................................................................................................................... 1

INTRODUCTION OF THE STUDY .......................................................................................... 1

1.0 Background to the problem ................................................................................................... I

l .l Statement of the Problem: ................................................ .................. .. ..................................... 4

1.2 General Objective of the study ................................................................................................. 5

1.3 Significance of Study ................................................................................................................ 5

CHAPTER TWO .......................................................................................................................... 7

LITERATURE REVIEW ............................................................................................................ 7

2.1 Introduction .............................................................................................. ................................. 7

2.2 Definition ofTerms .................................................................................................... ............... 7

2.2.1 Insurance ................................................................................................................................ 7

2.2.2 Insurance Industry .................................................................................................................. 7

2.2.3 Insurance Regulation ............................................................. ................................................ 8

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2.2.4 Insurance Regulatory Authorities .......................................................................................... 8

2.2.5 Insurance Policy ..................................................................................................................... 8

2.2.6 Insurance Premium ................................................................................................................ 8

2.2.7 Insurance Supervision ..................... ....................................................................................... 9

2.2.8 Stable Insurance Industry ....................................................................................................... 9

2.2.9 Insurance Company ............................................................................................................... 9

2.2.1 0 Insurance Industry Development .......................................................... ............................. 10

2.2.11 Undercapitalization ............................................................................................................ 10

2.2.12 Solvency Margin ................................................................................................................ 10

2.3 Theoretical Literature Review ................................................................................................ 11

2.3.1 Market Correction and Distortion Theory ............................................... ............................ 11

2.3 .2 Market Efficiency Theory .................................................................................................... 12

2.3.4 The Insolvency Danger Theory ........................................................................................... 13

2.3.5 The Protection Theory ......................................................................................................... 13

2.4 General Discussion ................................................................................................................. 14

2.4.1 Global Picture ...................................................................................................................... 14

2.4.2 Insurance Regulatory Authorities ........................................................................................ 14

2.4.3 Solvency Risk Protection ..................................................................................................... 15

2.4.4 Product Regulation ............................................................................................................... 16

2.4.5 Stability ofthe Financial Sector. .......................................................................................... 16

2.4.6 The Protection of Policy Holder ........... ............................................................................... 17

2.4.7 India Insurance Regulatory and Development Authority (IRDA) ....................................... 17

2.4.8 Insurance Regulation in United States of America (USA) .................................................. 18

2.4.9 Insurance Regulation in Kenya ............................................................................................ 19

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2.4. I 0 Insurance Regulatory Authority and Insurance Development in China ............................ I 9

2.4. I 1 Regulatory and Supervisory Activities in Tanzania .......................................................... 20

2.5 Empirical Studies .................................................................................................................... 22

2.6 Research Gap .......................................................................................................................... 27

2.7 Conceptual Framework ........................................................................................................... 28

CHAPTER THREE .................................................................................................................... 29

REGULATORY REFORMS AND LAWS PUT IN PLACE TO STRENGTHEN THE .... 29

3. I MANDA TORY VEHICLE INSURANCE BILL AND REGULATIONS ............................ 30

3.2 MICRO INSURANCE AND MICROINSURANCE ORGANISATIONS ........................... 3 I

REGULATIONS, .......................................................................................................................... 3 I

3.3 POLICYHOLDERS COMPENSATION FUND REGULATIONS ...................................... 32

3.4 INSURANCE (CORPORATE GOVERNANCE) REGULATIONS ..................................... 33

3.5 INSURANCE APPEALS TRIBUNAL (PROCEEDURE) REGULATIONS, ...................... 34

3.6 THE DRAFT INSURER [CONDUCT OF BUISNESS] REGULATIONS, ......................... 34

3.7THE DRAFT MICRO INSURANCE AND MICROINSURANCE REGULATIONS, .......... 34

3.8 THE INSURANCE [BANCASSURANCE] REGULATIONS, ............................................ 35

CHAPTER FOUR ....................................................................................................................... 36

HOW PRACTICALLY HAS THE INSURANCE REGULATORY AUTHORITY ........... 36

SUPERVISION OF THE INDUSTRY ..................................................................................... 36

4.1 CONSUMER EDUCATION .................................................................................................. 37

4.2 THE GUIDANCE ISSUED TO THE INDUSTRY BY THE INSURANCE ........................ 40

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CHAPTER FIVE ........................................................................................................................ 46

CHALLENGES FACED BY THE INSURANCE REGULATORY AUTHORITY OF ............ 46

REFERENCES ............................................................................................................................. 49