The Capital Markets Authority chief executive officer, has urged financial institutions to be more innovative in order to improve financial markets.
Speaking on the sidelines of the AIG breakfast meeting to unveil a new insurance policy - directors and officers’ cover, Mr Japheth Kato, called for more product innovations in the financial sector to help boost public appreciation of the sector in order to bolster penetration as well as rendering Uganda’s financial market more competitive.
During the meeting AIG unveiled a new policy - directors and officers cover that cushions such individuals against claims resulting from mistakes or misjudgments they might taken in the line of duty.
The policy, according to Mr Phillip Hobson, the AIG Africa manager financial lines, seeks to cover personal liability of directors and other workers and the insurer can reimburse the money to the firm in case it settles claims on behalf of its affected parties in question.
He said “The policy primarily pays for defense costs and financial losses in the event of a claim. It also widens to cover costs incurred in the course of investigations by regulators and public relations consultancy.” This, according to Mr Hobson protects the company and its management’s reputation in case of such unforeseen occurrences
Claims could emanate from court awards in favour of any third party affected by the decisions of the directors and officers; they could be sued by regulators, competitors, shareholders, investors, business partners and employees among others.
The insurance sector has in the recent past sought to improve penetration that currently stands at about 0.6 per cent. Uganda has the lowest insurance penetration in East Africa compared to Kenya’s 2.64 per cent, Tanzania’s and Rwanda’s 1 per cent respectively.