Insurance laws Botswana
In Botswana, the insurance industry is primarily regulated by the Insurance Industry Act of 2015 (as amended) and the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) Act. The NBFIRA is the key regulatory and supervisory body for the insurance sector, as well as other non-bank financial institutions.
Here are some key aspects of insurance law in Botswana:
1. Regulatory Framework:
NBFIRA: The Non-Bank Financial Institutions Regulatory Authority is the main regulatory body. Its mandate is to promote the stability, fairness, and efficiency of the non-bank financial sector, which includes insurance companies, brokers, and agents. NBFIRA is responsible for licensing, supervising, and enforcing compliance with the relevant laws.
Insurance Industry Act: This is the primary piece of legislation governing the establishment, licensing, and operation of all insurers, reinsurers, and insurance intermediaries (brokers and agents) in Botswana. The Act sets out detailed requirements for capital adequacy, solvency, corporate governance, and consumer protection.
2. Licensing and Business Operation:
All insurance companies and intermediaries must be licensed by NBFIRA to operate in Botswana.
The law mandates a strict separation between different types of insurance business. For example, a company cannot offer both life and general (non-life) insurance, with the exception of life insurers also offering accident and health insurance.
The law requires that all insurance for Botswana residents or companies must be placed with licensed Botswana insurers and reinsurers, unless a specific exemption is granted by NBFIRA.
3. Consumer and Policyholder Protection:
The legal framework places a strong emphasis on consumer protection. Insurers are required to provide clear and accurate policy documentation and to disclose all material information to clients.
The law outlines a "grace period" for premium payments, protecting policyholders from automatic policy suspension if a premium is slightly delayed.
There are specific rules regarding the protection of policy benefits, particularly for certain long-term policies, to prevent them from being easily seized by creditors.
The law provides for a mechanism for dealing with complaints and disputes between insurers and policyholders.
4. Compulsory Insurance:
Botswana has several classes of compulsory insurance, which are legally required by different pieces of legislation. These include:
Motor third-party liability insurance: Mandatory for all motor vehicles.
Professional indemnity insurance: Required for certain professionals.
Workmen's compensation insurance: Required by the Employment Act to cover employees for injuries sustained on the job.
5. Insurance Intermediaries:
The law distinguishes between insurance agents and brokers, and both must be licensed by NBFIRA.
Insurance agents represent a specific insurer, while insurance brokers act on behalf of the client to find the best policy from a range of insurers.
Intermediaries are required to adhere to a code of conduct and maintain professional indemnity insurance.
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