(Nairobi) – The Insurance Regulatory Authority (IRA) has taken steps to strengthen Kenya’s financial system by sensitizing insurance providers on Anti-Money Laundering (AML) Regulations. The training, held during a one-day workshop in Nairobi, targeted life insurers and investment-related insurance providers, equipping them with the knowledge and tools needed to meet legal compliance standards and promote financial transparency.
The workshop emphasized the importance of adhering to the Proceeds of Crime and Anti-Money Laundering Act, under which insurers, brokers, and agents are classified as “reporting institutions.” This legal designation requires these entities to follow strict customer identification and verification procedures to curb financial crimes such as money laundering.
Insurance penetration in Kenya remains low, at only 2.39 percent, compared to the global average of 7.2 percent. In this context, boosting public confidence through regulatory compliance is seen as vital for long-term sector growth.
Speaking on behalf of the Commissioner of Insurance and IRA CEO Godfrey Kiptum, the IRA Director of Supervision Kalai Musee said that enhancing internal compliance frameworks and improving transparency are essential in building trust with policyholders.
Musee explained that robust Know Your Customer (KYC) procedures are central to identifying, reporting, and preventing suspicious transactions. He stressed the value of risk assessments as part of a broader strategy to protect the integrity of the financial system.
“Insurance providers have been given the tools and guidance to improve their customer verification methods and overall risk management,” said Musee during the workshop, held at the College of Insurance.
He also pointed out the wider dangers posed by financial crimes, including terrorist financing and proliferation financing, warning that such crimes undermine economic stability and erode trust in the financial sector.
Musee noted that Kenya’s inclusion in the Financial Action Task Force’s (FATF) grey list in February 2024 signaled the need for more stringent oversight. He urged the insurance industry to take a leading role in reform efforts aimed at removing the country from the list.
He reiterated that the IRA is committed to upholding financial integrity through continuous awareness on AML, Combating the Financing of Terrorism (CFT), and Countering Proliferation Financing regulations. These initiatives, he said, are designed to ensure that insurers assess customer risk profiles accurately and confirm that their operations align with legal standards and corporate risk tolerance.
To assist insurance providers, the IRA is currently preparing Guidance Notes that will help stakeholders refine their AML and CFT compliance programs. The notes will address policy implementation gaps and offer clear steps for enhancing regulatory adherence.
Musee called on the industry to accelerate the rollout of Customer Identification Policies to help identify and prevent illegal financial activities within their operations. These policies are part of wider sector efforts to strengthen compliance and accountability across financial institutions.
The sensitization event followed up on resolutions made at the 15th Joint Financial Sector Regulators Forum held last year. During the forum, key financial regulators resolved to collectively improve the supervisory frameworks that oversee anti-money laundering and counter-terrorism financing standards.
The Joint Financial Sector Regulators Forum includes regulatory bodies such as the Central Bank of Kenya (CBK), the IRA, the Retirement Benefits Authority (RBA), the Capital Markets Authority (CMA), and the Sacco Societies Regulatory Authority (SASRA).