Insurance levy to be monitored
Posted Thursday, March 21 2013 at 02:00
Insurance companies charge a 0.5 per cent training levy on every insurance policy.
The Insurance Institute of Uganda plans to establish an independent board of trustees to provide checks and balances and ensure efficient use of the 0.5 per cent training levy that is charged on all insurance policies issued in the market.
According to the institute, insurance companies will only act as collection points of the levy but overseeing that it’s used for the intended purpose will be done by an independent body comprising of five members, four of whom will not be from the insurance industry but who have knowledge and skills in managing finances and legal background, among others.
The fifth person will be from the Insurance Regulatory Authority (IRA).
“We are looking at how best we can manage levy funds. We want people of high integrity and credibility that will ensure that the funds are not misappropriated,” said Ms Miriam Magala, the institute’s secretary, who also doubles as the chief executive officer of the Uganda Insurers’ Association, last week.
Insurance companies charge a 0.5 per cent training levy on every insurance policy that is sold in the market as provided for under the Insurance Amendment Act 2011, which came into effect in October last year.
The money should be remitted to the Insurance Institute of Uganda (IIU).
Funds generated through the levy are to empower IIU to develop relevant training programmes aimed at increasing professionals in the industry.
The local industry’s top management is mostly controlled by expatriates.
IIU chairman Geoffrey Kihuguru said the training levy is expected to finance 80 per cent of the institute’s Shs1.9 billion budget for this year.
The industry’s premiums grew to Shs296.83 billion in 2011, up from Shs239.98 billion in 2010.