For more effective regulation of authorized general insurance and better protection of the interests of policy holders, the OIC has been provided with express powers under Insurance Act to initiate investigation and impose a range of disciplinary sanctions on authorized general insurance companies.
The OIC may initiate an investigation under Insurance Act 1995:
- has reasonable cause to believe that a provision of the Insurance Act 1995 may have been contravened;
- has reasonable cause to believe that a person may have been involved in defalcation, fraud, misfeasance or other misconduct in relation to the carrying on of insurance business;
- has reasonable cause to believe that a person has carried on, or is carrying on, general insurance business in a manner that is not in the interests of policy holders or potential policy holders or the public interest; or
- has reason to enquire if a person is or was guilty of misconduct; or a person is or was not a fit and proper person to hold the position of a director or controller of the insurer.
The appointed investigators may require a person to produce a record or document, give an explanation in respect of the record or document, answer a question relating to the investigation, and give other assistance.
The OIC may take disciplinary actions against authorized insurer if the insurer is or was guilty of misconduct, or when a person is or was, in the opinion of the OIC, not fit and proper to hold the position of a director or controller of the insurer under Insurance Act 1995.
In addition, if the OIC is of the opinion that the person who hold the position of a director or controller of the insurer is not or is no longer fit and proper, the OIC may revoke the approval of the appointment as a director or controller of the insurer Insurance Act 1995. The OIC may also revoke the approval of the appointment of a person as a key person in control functions of the insurer if it appears to the OIC that the person is not or is no longer a fit and proper person to be appointed under Insurance Act 1995.
Before the OIC exercises the disciplinary power, the authorized insurer and person concerned would have a reasonable opportunity of being heard which may take the form of making written or oral representations.
If the OIC decides to exercise the disciplinary power, the decision would be issued to the authorized insurer concerned by notice in writing which must include:
- a statement of the reasons for the decision;
- the time when the decision is to take effect; and
- the sanction (whichever of the following is applicable):
- the duration and terms of any revocation, suspension or prohibition to be imposed under the decision;
- the terms of any reprimand; and
- the amount of any pecuniary penalty to be imposed and the period within which it is required to be paid.
The disciplinary actions may include:
- private or public reprimand;
- pecuniary penalty not exceeding the greater of K0 million or 3 times the profit gained or loss avoided as a result of the contravention;
- suspension of the authorization;
- revocation of the authorization; and
- prohibition of application for authorization.
In exercising the OIC’s power to impose pecuniary penalty, the OIC shall have regard to the Guideline on Exercising Power to Impose Pecuniary Penalty in respect of Authorised Insurers under the Insurance Act for factors to be considered.
OIC’s disciplinary decisions made under the OIC are appealable to a statutory and independent body, the Insurance Appeals Tribunal (“IAT”). If the affected person is aggrieved by the disciplinary decision of the OIC, the person may apply in writing to the IAT for the decision to be reviewed within 21 days after a notice informing the person of the decision has been served.