NAIROBI, Kenya — More than half of Kenya’s insurance firms have been hit with fines totaling over Sh80 million following challenges in complying with new global accounting standards, exposing widespread weaknesses in reporting systems and data management.
Fresh disclosures show that insurers paid Sh80.21 million in penalties in 2024 to the Insurance Regulatory Authority (IRA) after failing to meet reporting requirements under International Financial Reporting Standard (IFRS) 17.
The IFRS 17 standard, which took effect on January 1, 2023, replaced the previous IFRS 4 framework and represents one of the most significant overhauls in insurance accounting in decades. It is designed to improve transparency, consistency, and comparability in how insurers report their financial performance.
However, the transition has proven difficult for many firms. According to industry data, at least 33 insurers failed to submit quarterly or annual financial reports within the required timelines, triggering penalties under the Insurance Act.
The law requires insurers to file unaudited financial statements within 30 days after the end of each quarter. Non-compliance attracts a fine of Sh200,000 and an additional Sh10,000 for each day of delay.
Industry stakeholders say the shift to IFRS 17 has exposed deep-rooted structural challenges, including outdated IT systems, inconsistent historical data, and limited capacity to handle complex reporting requirements.
The Association of Kenya Insurers noted that many firms are struggling with fragmented data stored across legacy systems, making compliance difficult.
The penalties extend beyond insurers, with 10 insurance brokers also fined a combined Sh1.48 million for similar reporting failures. Additional fines were imposed on firms found to have breached anti-money laundering regulations, pushing total penalties across the sector to Sh83.32 million in 2024.
The fines mark a sharp increase from Sh31.75 million recorded in 2023, signalling intensified enforcement by the regulator as it pushes firms to align with the new standards. However, the figure remains below the peak of Sh94.85 million recorded in 2022.
Some of the largest penalties were imposed on major players, including Invesco Assurance, Jubilee Allianz General, and MUA Insurance, highlighting the scale of compliance challenges even among established firms.
