December 7, 2021


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Law provisions on the organisations of insurance business in Rwanda (Part one)

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Insurance business comprises the two main categories which include short-term insurance and long-term insurance.  It also comprises special insurance including: mutual insurance; micro insurance and captive insurance scheme, according to law n° 030/2021 of 30/06/2021 governing the organisation of insurance business in Rwanda.

Licence of carrying out insurance business

Insurance business on the territory of the Republic of Rwanda is carried out by a person holding a license issued by the Supervisory Authority.

Insuring risks outside the territory of Rwanda

An insurer or a reinsurer with a head office in Rwanda, who intends to carry out insurance business outside Rwanda or insure a risk located outside Rwanda, has to secure a prior authorisation issued by the Supervisory Authority.

A foreign insurer is authorised by the Supervisory Authority to insure a risk on the territory of Rwanda where one Rwandan insurer or in partnership with other insurers are unable to ensure that risk or the class of insurance required is not found in Rwanda. Other requirements for a foreign insurer to insure a risk located on the territory of Rwanda are specified in the regulations.

Requirements for licensing private insurer

Any person intending to carry out insurance business as a private insurer must:

1° be an institution registered in accordance with Rwandan Laws;

2° Have a minimum paid-up capital;

3° indicate the prospective insurance business category;

4° demonstrate shareholding structure;

5° demonstrate that qualifying shareholders possess good business standing, integrity, financial strength and ability to provide further financial support, if necessary;

6° prove that members of the Board of Directors, senior managers, auditors and actuaries are competent and capable to fulfil their responsibilities;

7° prove that it has got an effective risk management system;

8° demonstrate that internal procedures and information technology systems are adequate for the nature and scale of the proposed business operations;

9° demonstrate business plan and related financial estimates as well as solvency margins;

10°provide a valid proof of supervision made by the Supervisory Authority of the home country if the applicant is a foreign insurer. The regulations may provide for additional licencing requirements for a private insurer.

Application procedure for license to carry out insurance business

A person applying for a license to carry out insurance business as a private insurer submits a written application document to the Supervisory Authority or via electronic means together with other accompanying documents as may be specified by the regulations.

However, where deemed necessary, the Supervisory Authority may request submission of original copies of any application documents submitted

Feedback to the applicant

The Supervisory Authority notifies the applicant, within seven (7) working days from the date of reception of the application, that his or her application file is complete or incomplete. The Supervisory Authority grants or denies to grant to the applicant a license to operate as a private insurer, within a period not exceeding thirty (30) working days from the date of reception of the complete application documents.

However, the time referred to in the preceding Paragraph may be extended, when the Supervisory Authority finds that there is a need for additional information before a decision is taken. That period may not exceed thirty (30) working days. If the applicant is not comfortable with the response, he or she may appeal to a relevant organ within a period not exceeding thirty (30) days from the date of receipt of the response. Where the appellant is not comfortable with the response, he or she is entitled to six (6) months effective from the date of reception of the response, to file a case in a court of law

Fair treatment of consumer

An insurer must act with due skills, care and diligence when dealing with consumers and refrains from placing its interests above those of consumers. The regulations set up other market conduct requirements observed by an insurer, including the following: 1° disclose information to consumer; 2° collect information about consumer; 3° make advertisements; 4° deal with claims settlement and handle complaints; 5° sell or provide insurance policies services through electronic means

Pre-sale process of insurance products

When developing and marketing insurance products, an insurer must consider the interests of the consumer especially the following:

1° promoting products and services in a manner that is clear, fair and not misleading;

 2° complying with the requirements set out by the Supervisory Authority with regard to the timing, service delivery and content of information provided to the consumer at the time of sale;

 3° ensuring whether, the consumer receives appropriate advice before entering into an insurance contract;

4° establishing that any potential conflict of interest is properly managed, where consumer receives advice prior to entering into an insurance contract.

Criteria for setting rates of insurance premiums and contributions

An insurer puts in place a written underwriting and pricing policy for each class of insurance. Premium rates are based on actuarial premium rates, statistical and financial methods. In setting premium rates as stated in the preceding Paragraph, at least the following is considered:

1° nature of risk insured;

2° sum insured;

3° amount of indemnity or payment;

4° nature of the risk;

5° behaviour of a policyholder;

6° claims ratio. The basis for determining the contribution of insurance in public insurers is determined by relevant laws. Insurers organised in associations are not allowed to set common insurance premium rates. Insurers are not allowed to form cartels with a view to set rates of premiums and contributions of insurance. The regulations set out other methods for insurers to set rates of premiums and contributions of insurance.

Measures for countering fraud

An insurer must undertake effective measures to prevent, detect, report and fight against fraud in insurance business. Requirements to counter fraud in insurance business are determined by the regulations. The Supervisory Authority may take appropriate enforcement action to ensure compliance with the regulations referred to in Paragraph two of this article.

Anti-money laundering and combating the financing of terrorism

An insurer must take effective measures to combat money laundering and the financing of terrorism. Without prejudice to the provisions of the laws for combating money laundering and financing terrorism, the Supervisory Authority may issue specific guidelines in respect of anti-money laundering and combating the financing of terrorism applicable by all parties bound by the provisions of this Law, and take appropriate enforcement measures to ensure their implementation.

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