- Assented to on 8 January 2010
- Commenced on 1 October 2010
- [This is the version of this document at 31 December 2014.]
- [Note: This version of the Act was revised and consolidated in the Fifth Revised Edition of the Laws of Malawi (L.R.O. 1/2018), by the Solicitor General and Secretary for Justice under the authority of the Revision of the Laws Act.]
Part I – Preliminary
1. Short titleThis Act may be cited as the Insurance Act.
3. Principal object of this ActThe principal object of this Act is to make provision for the enhancement of the safety, soundness and prudent management of insurers and other persons involved in the insurance industry in Malawi with the aim of protecting the interests of insurance policyholders and ensuring the highest standard of conduct of business of insurance companies, brokers and agents.
4. Application of the Financial Services ActThis Act shall apply to the insurance industry in addition to the Financial Services Act.[Cap. 44:05]
5. Licensing and registration proceduresThe provisions relating to licensing and registration applications contained in the Financial Services Act, shall apply mutatis mutandis to this Act.[Cap. 44:05]
Part II – Insurers
6. Categories and classes of insurance
7. Insurers to be licensed
8. Registration criteria
9. Reasons for rejecting an application for a licence
10. Commencement of businessNo insurer shall commence his business until the Registrar has approved the commencement, which the Registrar shall not do unless satisfied that—
11. Suspension and revocation of licences
12. Revocation of licence on ceasing to carry on business
13. Margin of solvency sufficient for the purposes of carrying on insurance businessAn insurer shall be treated as having a margin of solvency sufficient for the purposes of carrying on any class of insurance business if the insurer meets solvency conditions as set out in the Registrar’s directives.
Part III – Provisions governing the carrying on of insurance business by insurers
14. Application of Part IIIThis Part applies to insurers.
15. Insurers to maintain principal office and appoint principal officer
17. Reinsurance contracts of insurers
18. Insurance business to be placed within MalawiNo insurer, insurance broker, insurance agent or any other person shall place insurance business, other than reinsurance business, outside Malawi unless it is approved in writing by the Registrar.
19. Annual financial statements
20. Request for audit by shareholders and policyholdersIf required by the shareholders and policyholders, an external auditor of an insurer shall audit a report on any financial statements presented to them by the Board of Directors and the external auditor shall express an opinion on the fair presentation of the financial statements.
21. Audit for external reinsurerAn external reinsurer shall have the financial statements of its reinsurance business in Malawi audited by the auditors of the head office of the external reinsurer, and the auditors shall express an opinion on the fair presentation of the financial statements using the auditing and accounting standards applicable in the country of the head office.
22. Appointment of an actuary
Part IV – Special provisions governing the carrying on of life insurance business by insurers
23. Application of Part IVThis Part shall apply to life insurers.
24. Life insurers carrying on business other than life insurance business
25. Actuaries of life insurers
26. Assets of insurer may include shares in holding companyIf the assets which a life insurer holds in its life insurance funds in respect of its liabilities to policyholders include shares in its holding company—
Part V – Licensing of insurance brokers
27. Insurance brokers to be licensed
28. Insurance brokers to maintain professional indemnity and fidelity insurance policies
29. Termination of an insurance broker’s appointment
30. Revocation of licence at the request of an insurance broker, etc.Notwithstanding provisions of the Financial Services Act, the Registrar shall not revoke an insurance broker’s licence at the request of the broker unless satisfied that all liabilities of the broker in respect of his business are met or other provision is made for them by means acceptable to the Registrar[Cap. 44:05]
31. Trust fundsAll funds received or receivable by an insurance broker in the course of business on behalf of insurers from members of the public shall be treated as trust funds and no insurance broker shall assign, pledge or in any way charge the trust funds.
32. Directives for insurance brokersWithout limiting the Registrar’s powers under the Financial Services Act to issue Registrar’s directives, the Registrar’s directives may make provision with respect to trust funds under section 31 and the keeping of trust accounts by insurance brokers.[Cap. 44:05]
Part VI – Licensing of agents for brokers
33. Agents for brokers to be licensed
34. Licensing insurance agents for brokers, etc.
35. Misrepresentation prohibited
36. Termination of agency
37. Agent for broker
38. Suspension and revocation of insurance agent’s for brokers licences
Part VII – Licensing of insurance agents
39. Insurance agents, etc., to be licensed
40. Licensing insurance agents, etc.
41. Misrepresentation prohibited
42. Termination of agency
43. Agent for insurer
44. Suspension and revocation of insurance agents licences
Part VIII – Collection of premiums by brokers or agents
45. Interpretation of terms in Part VIIIIn this Part, unless the context otherwise requires—"prescribed credit period" means the period that starts—(a)in the case of a new policy, at the inception date of the policy;(b)in the case of an existing policy which has been renewed, at the renewal date of the policy; and(c)in the case of a policy endorsement and a declaration under an open cover policy, on the first day of the month following the date upon which documentation is issued by the insurer to the policyholder concerned,and ends as specified in the agreement with the insurer.
46. Collection of premiums
Part IX – Licensing of loss assessors/adjustors, and claims settling agents
47. Loss assessors/ adjustors and claims setting agents to be licensed
48. Licensing loss assessors/ adjustors and claims setting agentsIf an application is made in accordance with the Financial Services Act for a licence to carry on the business of loss assessor/ adjustor or claims settling agent the Registrar may grant the licence if the applicant—
Part X – Investments, loans and ownership
49. Investments and lending policiesThe board of directors of an insurer shall establish and monitor, and an insurer shall implement investment and lending policies, standards and processes that a reasonable and prudent person would apply in respect of investments and loans to avoid undue risk of loss and obtain a reasonable return.
50. Approval of investments
51. Acquiring ownership interestNotwithstanding section 49, where an insurer has made a loan to an entity and a default has occurred, the insurer may acquire all or any of the ownership interest in the entity or its affiliates:Provided that the insurer undertakes to the Registrar to do all things necessary to ensure that it divests itself of the ownership interest within two years.
52. Investment of assetsSubject to provisions of this Act, the articles of association of an insurer and any other reasonable constraints imposed on the insurer by other rules in respect of the manner in which it may invest its assets, the assets of the insurer shall be invested in Malawi with sufficient regard to the consideration of liquidity, return and security.
53. Prudential limitThe Registrar may by directives, prescribe prudential limits for consumer and commercial lending by insurers under the size of loans and aggregate exposure of an insurer to different types of lending, stated as a percentage of its local assets.
54. Disposal of loans and investmentsThe Registrar may, by order, direct an insurer to dispose of, within such period as the Registrar considers reasonable, any loan or investment made or acquired in contravention of this Act and directives.
55. Restriction of control
56. Amalgamation or transfer of insurance business
Part XI – Winding-up of insurance companies
57. Companies Act to applySubject to the provisions of this Part, the provisions of the Companies Act and the Financial Services Act, relating to winding-up of companies shall be applicable to insurance companies and insurance brokers which are companies within the meaning of that Act:Provided that the provisions of the Companies Act, specifically applicable to creditors and members voluntary winding-up shall not apply to insurance companies.[Cap. 46:03][Cap. 44:05]
58. Winding-up of an insurance companyThe Registrar shall not approve the winding-up of an insurer until such a time as all policyholders benefits are paid, or all policyholders are transferred to an alternative insurer under a scheme for the transfer or the amalgamation of policyholders in accordance with provisions of the Financial Services Act, and the Registrar’s directives.[Cap. 44:05]
59. Rights of an insured personFor the purposes of any winding-up and notwithstanding anything to the contrary contained in the Companies Act or in the Bankruptcy Act, any entry in the books, account or records of an insurer respecting receipt of premiums, assumption or risk in insurance contracts, liability on insurance claims and life insurance fund, shall be prima facie evidence of the rights of the insured person.[Cap. 46:03][Cap. 11.01]
60. Distribution of insurer’s assetsNotwithstanding the provisions of the Companies Act and provisions of the Bankruptcy Act, in the winding-up of an insurer the assets of the insurer shall be distributed after payment of the secured and otherwise preferred claims in the following order—
61. Unclaimed moneyAny sums of money remaining unclaimed after the winding-up of an insurer shall be deposited in the Bankruptcy Estates Accounts at the prescribed bank or with the Accountant General as if they were unclaimed and undistributed funds and provisions of the Bankruptcy Act and the provisions shall apply accordingly.[Cap. 11:01]
Part XII – Miscellaneous provisions
62. Other actions requiring prior approval of the RegistrarWithout limiting the Registrar’s powers under the Financial Services Act, an insurer, an insurance broker or insurance agent, as the case may be, shall obtain prior written approval of the Registrar for the following matters—
63. Disqualification of directorsWithout limiting the Registrar’s power under the Financial Services Act to issue Registrar’s directives, the following persons shall be disqualified from being appointed directors of an insurer—
64. Insurers to appoint licensed agents or brokersUnless authorized by the Registrar, an insurer shall not appoint as an agent or a broker a person who is not licensed as such under this Act.
65. Settlement of claims by insurers
66. Service of process against licensed insurers
67. Action by policy-owners against insurers
68. Deposit of approved securities
69. Documents to be signed and accompanied by copies
70. Sums insured, etc., to be stated in currency of MalawiUnless the exchange control authorities have approved the transaction in writing, insurers shall not quote insurance contracts in foreign currency.
71. Default of an insurer, etc., not to invalidate policySubject to this Act, failure on the part of an insurer, insurance broker or agent to comply with any provision of this Act shall not invalidate any policy issued by the insurer.
72. Policies to be printed in clearly legible letters, etc.No insurer shall issue a policy in a form, the printed provisions of which, whatever their nature, are not put in a clear type face in letters of a uniform size of not less than ten points.
73. Persons acting on behalf of unlicensed insurers
74. References to insurance companies in other written lawsAny reference in any written law in force in Malawi relating to companies or to a company carrying on insurance business under any other written law or to an insurance company registered or licensed under any other written law shall be read and construed as a reference or if the context so requires, as including a reference to a company on insurance business under this Act.
75. Inconsistency with the Companies ActWherever the provisions of this Act are inconsistent with or in addition to the provisions of the Companies Act, the provisions of this Act shall apply.[Cap. 46:03]
76. Contravention of this Act, regulations, or directives
79. Compliance with this Act
80. Repeal and savings
History of this document
31 December 2014 this version
01 October 2010
08 January 2010
|Insurance (Determination of Policy Liabilities of Life Insurers) Directive, 2018||Government Notice 61 of 2018|
|Insurance (Inclusive Insurance) Directive, 2019||Government Notice 34 of 2019|
|Insurance (Operation of Life Insurance Funds) Directive, 2018||Government Notice 60 of 2018|
|Insurance (Reserving Requirements for General Insurers and Reinsurers) Directive, 2019||Government Notice 33 of 2019|