CHAPTER 394
INSURANCE ACT

[SUBSIDIARY LEGISLATION]

INDEX TO SUBSIDIARY LEGISLATION

   NOTICES

      The Insurance Companies (Registration) Notice

   ORDERS

      The National Insurance Board (Establishment) Order

      The Tanzania National Reinsurance Corporation (Establishment) Order

   REGULATIONS

      The Insurance Regulations

NOTICES

THE INSURANCE COMPANIES (REGISTRATION) NOTICE

(Section 19(4))

G.N. No. 626 of 1998

   1. This Notice may be cited as the Insurance Companies (Registration) Notice.

   2. Notice is hereby issued to the general public in respect of the registration of Insurance Companies the particulars of which are specified in the Schedule to this Notice.

SCHEDULE

A:

(i)

Name of Company

National Insurance Corporation (Tanzania) Limited

(ii)

Postal Address

P.O. Box 9264, Dar es Salaam

(iii)

Class of Insurance

All non-marine business
All marine and aviation business
Life assurance business including pensions

(iv)

Title or designation person entrusted with managing the Company

The Managing Director

(v)

Additional information

Fees paid Shs. 5,000,000/= Certificate issued at Dar es Salaam on the 17th day of June, 1998 to December, 31, 1998 Certificate No. 00000001. Duration from 17th June, 1998 to December, 31, 1998

B:

(i)

Name of the Company

The Jubilee Insurance Company of Tanzania Limited

(ii)

Postal Address

P.O. Box 20524, Dar es Salaam

(iii)

Classes of Insurance

All marine and aviation business
Life assurance including pensions

(iv)

Title or designation of person entrusted with managing the company

The General Manager

(v)

Additional information

Fees paid shs. 5,000,000/=
Certificate issued at Dar es Salaam on 17th day of June, 1998
Certificate No. 00000002 Duration from 17th June, 1998 to December 31st, 1998

C:

(i)

Name of Company

Alliance Insurance Corporation Limited

(ii)

Postal Address

P.O. Box 2763, Dar es Salaam

(iii)

Classes of Insurance

All marine and aviation business
All non-marine business
Life assurance including pensions

(iv)

Title or designation of person entrusted with managing the Company

Director

(v)

Additional information

Fees paid Shs. 5,000,000/=
Certificate issued at Dar es Salaam on 23rd day of July, 1998
Certificate No. 00000003 Duration: from July 23rd, 1998 to 31st December, 1998.

D:

(i)

Name of the Company

Royal & Sun Alliance Insurance (Tanzania) Limited

(ii)

Postal Address

P.O. Box 8636, Dar es Salaam

(iii)

Classes of Business

All marine and aviation business
All non-marine business excluding classes of long term insurance

(iv)

Title or designation of person entrusted with managing the Company

The General Manager

(v)

Additional information

Fees paid shs. 5,000,000/=
Certificate issued at Dar es Salaam on 23rd day of July, 1998
Certificate No. 00000004
Duration: from July 23rd, 1998 to December 31st, 1998.

ORDERS

THE NATIONAL INSURANCE BOARD (ESTABLISHMENT) ORDER

(Section 6(2))

[27th August, 1997]

G.N. No. 183 of 1998

1.   Citation

   This Order may be cited as the National Insurance Board (Establishment) Order.

2.   Definition

   In this Order, unless the context requires otherwise–

   "the Act" means the Insurance Act *;

   "the Board" means the National Insurance Board established by paragraph 3 and referred to in section 6(2) of the Act;

   "the Commissioner" means the Commissioner of Insurance appointed under the Act;

   "Minister" means the Minister responsible for finance.

3.   Establishment of Board

   There is hereby established a Board to be known as the National Insurance Board, and whose membership composition shall be as provided by section 6(3).

4.   Functions of the Board

   The Board shall, in pursuance of the provisions of section 6(2) of the Act, have power to–

   (a)   provide advice and assistance to the commissioner generally in the regulation and supervision of insurance business in the country;

   (b)   provide advice to the Commissioner generally in the performance of his functions and duties under the Act;

   (c)   consider and advise the Commissioner on any application for registration or any other case submitted to the Board by the Commissioner or the Minister;

   (d)   advise the Commissioner on any measures to be taken in any case of contravention of the Act;

   (e)   consider and advise the Minister in relation to any application for exemption made under section 117 of the Act;

   (f)   do or perform any other act or thing in relation to insurance as the Minister may by writing under his hand direct.

5.   Procedure of Board

   Subject to the Act and any regulations made under it, the Board shall regulate its own proceedings.

THE TANZANIA NATIONAL REINSURANCE CORPORATION (ESTABLISHMENT) ORDER

(Section 70)

[1st January, 2001]

G.N. No. 35 of 2001

PART I
PRELIMINARY PROVISIONS (sections 1-2)

1.   Citation

   This Order may be cited as the Tanzania National Reinsurance Corporation (Establishment) Order.

2.   Interpretation

   (1) In this Order, unless the context requires otherwise–

   "Act" means the Insurance Act *;

   "Board" means the Board of Directors of the Company;

   "Company" means the Tanzania National Reinsurance Corporation established pursuant to paragraph 3;

   "Commissioner" means the Commissioner of Insurance;

   "Director" means the Chairman and any other director appointed in accordance with the Articles of Association.

   (2) In this order, terms relating to insurance or insurance business shall bear the meaning assigned to them in the Act.

PART II
THE TANZANIA NATIONAL REINSURANCE CORPORATION (TANRE) (sections 3-8)

3.   Establishment

   (1) The Minister shall not later than the 31st day of January, 2001, and subject to this Order, cause to be incorporated under the Companies Act *, a company to be known as the Tanzania National Reinsurance Corporation Limited or by the acronym TANRE.

   (2) The Company shall be a body corporate and shall–

   (a)   have perpetual succession and a common seal;

   (b)   in its corporate name, be capable of suing and being sued;

   (c)   be capable of purchasing and otherwise acquiring or alienating any movable or immovable property;

   (d)   have power, from time to time, to execute and perform such other powers and functions as are conferred by or under this order or any other written law.

4.   Functions of the Company

   The functions of the Company shall be to undertake, carry on and transact in any manner, whether in the United Republic or elsewhere the business of insurance and reinsurance of all kinds, classes, nature and description.

5.   Exemptions

   The Minister may, by order published in the Gazette, exempt the Company from paying any tax, duty, fee, levy, cess or other impost.

6.   Authorized capital

   (1) The initial authorized capital of the Company to be registered shall be twenty billion shillings.

   (2) The Company shall have power in general meeting to increase the level of the authorized capital subject to the prior approval of the Minister.

7.   Share capital and allotment

   (1) The Company shall issue such shares as shall be decided by the Company in a general meeting and with the consent of the Minister, which shares shall be equal to the working Capital required to sustain the operations of the company.

   (2) The issued capital as determined under subparagraph (1), shall be allotted to shareholders in the relevant proportions as follows, namely–

   (a)   10% of capital to individual persons;

   (b)   20% of capital to Tanzania bodies corporate;

   (e)   10% of capital to registered insurance companies;

   (d)   5% of capital to registered insurance brokers, loss assessors and loss adjusters;

   (e)   40% of capital to Government institution;

   (f)   15% of capital to foreign participants.

   (3) Subject to subparagraph (2), the issued capital may be allotted to other shareholders at such times and in such manner as shall be determined by the Minister upon recommendations by the Company.

   (4) The total foreign investment in the Company shall not at any time exceed fifteen percent of the total shareholding in the Company or such other percentage as the Minister may from time to time determine, after consultation with the shareholders.

   (5) Shares required to be issued pursuant to this section shall be issued or allotted as fully paid and treated for the purposes of the Companies Act * as paid up by virtue of payment to the Company of their nominal value.

8.   Shares

   (1) The authorized share capital of the Company shall be stated in the Memorandum of Association to be of such an amount and of such nominal value as shall be determined by the Company in general meeting after consultation with the Minister, with power for the Company to increase or reduce the said capital and to vary or abrogate the rights attached to any class of shares in the Company to issue any part of its capital, original or increased, with or without any preference, priority or special privilege, or subject to any postponement of right, or to any conditions of issue shall otherwise expressly declare, every issue of shares, whether declared to be preference or otherwise, shall be subject to the powers contained in the provision.

   (2) Any share may be issued with such preferred, deferred or otherwise special rights or restrictions, whether in regard to dividend, voting, return on capital or otherwise as the directors may, with the prior approval of the special right shareholders, determine.

   (3) The Company in a general meeting may, with prior approval of the Minister, increase its share capital by the creation of new shares of such an amount as may be deemed expedient, upon any such terms and conditions or with such rights or privileges as the general meeting may determine and attach any special rights to any existing class of shares.

PART III
ADMINISTRATION OF THE COMPANY (sections 9-11)

9.   Annual General Meeting

   (1) The Company shall in each year hold an Annual General Meeting in addition to any other meetings in that year, in the manner and within specified times as shall be set out in the Articles of Association.

   (2) The Articles of Association shall provide for the role, the procedure and other matters with respect to Annual General Meeting.

10.   Board of Directors

   (1) There shall be a Board of Directors which shall, subject to the provisions of this order, be responsible for the carrying out of the functions and management of the affairs and business of the Company.

   (2) All directors of the Company shall be natural persons and shall be not less that two and not more than such number as shall be determined by the Company in a general meeting.

   (3) The directors shall initially be appointed by the Minister and, after shares are allotted to other shareholders, by the shareholders in such proportion of their respective shareholdings as shall be provided by the Articles of Association of the Company.

   (4) There shall be a Chairman of the Board of Directors who shall initially be appointed by the Minister and, after shares are allotted to other shareholders, by the shareholders in such manner as shall be decided by the Company in a general meeting.

11.   Dividends

   The Company shall declare dividends after prior approval of the general meeting.

PART IV
REINSURANCE (sections 12-15)

12.   Compulsory reinsurance

   (1) Every insurer shall, on or after the commencement of this Order, reinsure with the Company and in doing so shall–

   (a)   cede to TANRE 25% of his liabilities for each policy issued by him; and

   (b)   in addition, cede to TANRE 25 % of his treaty reinsurance business.

   (2) Subject to subparagraph (1), the Minister may prescribe the manner in which and the time at which reinsurance shall be effected under this Part and may also prescribe the terms and conditions on which such reinsurance shall be effected.

   (3) A notice under this paragraph may apply to all classes of insurance business or to such classes of insurance business as may be specified therein and may make different provisions for different classes of insurance business.

13.   Power to decline business

   (1) The Company may refuse to accept any reinsurance offered pursuant to this Part, and in any such case the Company shall furnish the insurer concerned, the reasons for such refusal.

   (2) Any insurer may, within fourteen days after receiving reasons for the refusal pursuant to subparagraph (1), appeal to the Commissioner against such refusal and further appeal to the Minister or, if there are issues of law involved, to the High Court.

   (3) Where reinsurance is refused under this paragraph, any liability of insurer under this Part in respect of that reinsurance shall cease.

14.   Payment

   Payment by insurers to the Company in respect of reinsurance effected under this Part, shall be made within such period as the Minister may, by notice published in the Gazette prescribe.

15.   Returns and information

   Every insurer required to effect reinsurance under this Part, shall produce or submit to the Company all returns, statements, books, records, accounts or other documents relating to reinsurance business placed with the Company and shall furnish such all information as may be required of him by the Commissioner or the Company for the purposes of this Part.

PART V
MISCELLANEOUS PROVISIONS (sections 16-18)

16.   Capitalisation

   (1) The Company in a general meeting and on the recommendation of the directors, may resolve that it is desirable to capitalise any sum for the time being standing to the credit of any reserve account or profit and loss account or otherwise available for distribution to members, and that that sum be applied in any of the ways that the profits of the Company may be properly applied.

   (2) The ways in which any sum may be applied for the benefit of the members under subparagraph (1) are–

   (a)   in paying up any amounts unpaid on shares held by members; or

   (b)   in paying up in full unissued shares or debentures to be issued to members as fully paid.

17.   Accounts and Audit

   (1) The directors shall ensure that the Company maintains such accounting records as are required to comply with the requirements of the Companies Act * and of this Order.

   (2) The Company in a general meeting shall appoint the Auditor, fix his remuneration and regulate his duties in accordance with the Companies Act *.

18.   Winding up

   If the Company is wound up, the liquidator may divide among the members or class of members any part of the assets of the company according to the value that the liquidator sets for those assets.

REGULATIONS

THE INSURANCE REGULATIONS

TABLE OF CONTENTS

   Regulation

Title

PART I
PRELIMINARY PROVISIONS

   1.   Citation.

   2.   Interpretation.

PART II
REGISTRATION OF INSURERS

   3.   Application for registration by an insurer.

   4.   Expiry and renewal of registration.

   5.   Certificate of registration.

PART III
QUALIFICATIONS OF INSURERS, BROKERS AND LOSS ADJUSTERS

   6.   Qualifications in respect of natural persons and companies.

   7.   Qualifications of Chief Executive or Principal Officer.

   8.   Qualifications of Chief Finance Officer.

   9.   Qualifications of an agent.

   10.   Restriction on having more than one Principal Officer.

   11.   Qualifications of risk managers, loss adjusters, etc.

PART IV
REGISTRATION OF INSURANCE BROKERS

   12.   Application for registration of Insurance Brokers, Agents, etc.

   13.   Registration Certificate.

PART V
CAPITAL REQUIREMENT FOR INSURERS AND BROKERS

   14.   Insurer's paid up capital.

   15.   Maintenance of security deposit.

   16.   Insurer's margin of solvency.

   17.   Calculation of assets and liabilities of general insurer.

   18.   Calculation of assets and liabilities of long term insurer.

   19.   Calculation of assets and liabilities of both general and long term.

   20.   Paid up capital for insurance brokers, loss adjusters, etc.

PART VI
INSURERS' ACCOUNTS AND RETURNS

   21.   Insurer's account.

   22.   Separation of accounts.

   23.   Insurer's reserves.

   24.   Annual returns of insurers.

   25.   Code of Practice for Insurers.

PART VII
BROKERS' ACCOUNTS AND RETURNS

   26.   Broker's accounts.

   27.   Annual returns of brokers.

   28.   Broker's minimum indemnity.

   29.   Broker's security deposit.

   30.   Broker's guarantee.

   31.   Remittance of premium by brokers.

   32.   Brokers Code of Conduct.

PART VIII
PERCENTAGE OF ASSETS TO BE HELD IN APPROVED TANZANIA SECURITIES

   33.   Long term insurance.

   34.   General insurance.

PART IX
RESTRICTION OF PLACEMENT OF INSURANCE BUSINESS OUTSIDE TANZANIA

   35.   Insurance to be held with Tanzanian Insurers.

PART X
NATIONAL INSURANCE BOARD

   36.   Conduct of the business of the Board.

PART XI
MISCELLANEOUS PROVISIONS

   37.   Actuary's abstract on investigation.

   38.   Friendly societies.

   39.   Fees.

SCHEDULES

THE INSURANCE REGULATIONS

(Section 139)

G.Ns. Nos.
124 of 1998
14 of 2002

PART I
PRELIMINARY PROVISIONS (regs 1-2)

1.   Citation

   These regulations may be cited as the Insurance Regulations.

2.   Interpretation

   In these regulations, unless the context requires otherwise–

   "accounts" in relation to an insurer or broker means accounts and information prepared in accordance with the Companies Ordinance;

   "Commissioner" means the Commissioner of Insurance appointed in accordance with section 5(2) of the Act;

   "gross premium" means the total policy premium receivable;

   "net liabilities" means gross claims payable to an insured less attributable gross reinsurance recoveries receivable;

   "net premium" means gross premium receivable less gross reinsurance premium payable;

   "payable" means both paid and payable;

   "preference shares" means shares which are given preference over ordinary shares;

   "receivable" means both received and receivable.

PART II
REGISTRATION OF INSURERS (regs 3-5)

3.   Application for registration as an insurer

   An application for registration as an insurer shall be submitted to the Commissioner and shall be in a form set out in the First Schedule to these regulations.

4.   Expiry and renewal of registration

   (1) Subject to regulation 3 registration of a registered insurer shall expire on the 31st day of December of the year of registration.

   (2) Subject to regulation 3 an application for the renewal of registration shall be made on or before the 30th day of November of the preceding year in the prescribed form and shall be accompanied by the prescribed fee.

   (3) The Commissioner may extend the time for submission of an application for renewal of registration upon payment of penalty fees, which shall not exceed the prescribed fee for registration.

[3A]

5.   Certificate of registration

   The Commissioner shall issue to every successful applicant a certificate of registration which shall be in the form set out in Form No. 2 specified in the First Schedule.

[4]

PART III
QUALIFICATIONS OF INSURERS, AGENTS, BROKERS AND LOSS ADJUSTERS (regs 6-11)

6.   Qualification in respect of natural persons, and companies

   (1) A person not being a company shall not enter into or maintain an insurance agency agreement with an insurer or a broker unless he–

   (a)   is a resident of Tanzania;

   (b)   has attained the age of twenty-one years;

   (c)   has not been convicted in any Court in any country of an offence involving dishonesty or any other crime of a serious nature;

   (d)   has not been adjudged insolvent or bankrupt, unless he has subsequently been rehabilitated or discharged; and

   (e)   possesses additional qualifications as described in Regulation 6(1)(a) and (b).

   (2) A limited liability company, shall not enter into or maintain an insurance agency agreement with an insurer or a broker unless it is a company incorporated in Tanzania under the Companies Ordinance any or any other law in the United Republic and deemed by the Commissioner to be resident in Tanzania.

[5]

7.   Qualifications of Chief Executive or Principal Officer

   (1) Every insurer, broker or loss adjuster shall have at least two full-time chief executives or principal officers each of whom shall–

   (a)   be a holder of the Associate Chartered Insurance Institute (ACII), Diploma in Insurance from the Institute of Finance Management, the Advanced Diploma in Insurance from the Institute of Finance Management (IFM), a recognized Degree or any other recognized equivalent professional insurance qualification; and

   (b)   be a person with eight years post qualification experience in the insurance industry, five years of which should have been in a managerial or executive or analogous position.

   (2) Notwithstanding subregulation (1) of this Regulation, a person who has been employed full-time in an insurance business in an executive or managerial position for a period of not less than ten years shall qualify to be appointed as a Principal Officer of an Insurer or Broker.

   (3) Every Technical Department or Division or any Branch Officer or control office of an insurer, broker, or loss adjuster shall have as its head a qualified and competent officer in accordance with this regulation.

[6]

8.   Qualifications of Chief Finance Officer

   (1) Every insurer shall have at least one full-time professional Chief Finance Officer or Accountant who shall possess the following qualifications–

   (a)   the C.P.A., ACCA, or ACA; or

   (b)   a University Degree, majoring in accounting finance; or

   (c)   a Diploma in accountancy from a recognized institute; and

   (d)   five years' post-qualification experience.

   (2) It shall be the duty of every insurer, broker and loss adjuster to furnish the Commissioner with a statement in respect of the qualification of its principal officers.

[7]

9.   Qualifications of an agent

   No person shall be registered as an agent unless he–

   (a)   is a holder of the National Secondary Education Certificate with at least five passes including one in the English language; and/or

   (b)   is a holder of a certificate of proficiency in insurance.

[8]

10.   Restriction on having more than one Principal Officer

   (1) An insurance agent shall not have more than one principal at a time, and shall give business to another insurer only where principal does not underwrite the particular class of business or the principal has declined business.

   (2) An agent transferring to another principal shall submit for the Commissioner's approval, a letter of clearance from his current principal insurer.

[9]

11.   Qualifications of risk managers, loss adjusters etc.

   Qualifications of risk managers, loss adjusters, insurance surveyors and claims settling agents shall be determined by the Commissioner and the Commissioner shall from time to time publish such qualifications in the Gazette.

[10]

PART IV
REGISTRATION OF INSURANCE BROKERS (regs 12-13)

12.   Application for registration of insurance brokers, agents, etc.

   (1) Every application for the registration and renewal of registration as an Insurance Broker shall be submitted to the Commissioner in the Form No. 3 which is set out in the First Schedule and shall be accompanied by the documents referred to in that Form.

   (2) The Form referred to in subregulation (1), shall be used in the application by Insurance Agents, Insurance Brokers, Risk Managers, Loss Adjusters, Assessors, Insurance Surveyors and Claims Settling Agents.

[11]

13.   Registration Certificate

   (1) The Commissioner shall issue a certificate of registration to every successful applicant.

   (2) Subject to subregulation (1), the registration of a registered Insurance Agent, Insurance Broker, Risk Manager, Loss Adjuster, Assessor, Insurance Surveyor and Claims Settling Agent shall expire on the 31st day of December of the year of registration.

   (3) Subject to subregulation (4) an application for the renewal of registration shall be made on or before the 30th day of November of the preceding year in the prescribed form and shall be accompanied by the prescribed fee.

   (4) The Commissioner may extend the time for submission of an application for renewal of registration upon payment of penalty fees and shall not exceed the prescribed fee for registration.

   (5) The certificate of registration shall be as set out in Form No. 3 of the First Schedule.

   (6) The certificate of registration referred to in subregulation (2) shall be used in relation to the registration Insurance Agents, Insurance Brokers, Risk Managers, Loss Adjusters, Assessors, Insurance Surveyors and Claims Settling Agents.

[12]

PART V
CAPITAL REQUIREMENT FOR INSURERS AND BROKERS (regs 14-20)

14.   Insurer's paid up capital

   (1) The amount of paid up capital to be maintained by an insurer pursuant to section 11 of the Act shall be–

T.Shs.

   (a)   Long Term Insurance Business .......................

500,000,000,00

   (b)   General Insurance (Marine and Non-Marine)

500,000,000,00

   (c)   Composite Insurance ......................................

1,000,000,000,00

   (d)   Non-Marine Insurance .....................................

250,000,00,00

   (e)   Marine Insurance .............................................

250,000,000,00

   (f)   Insurance Brokers ...........................................

10,000,000,00

   (g)   Loss Adjusters, Insurance Surveyors, Motor Assessors, Risk Managers .............................

2,000,000,00

   (2) The term "paid up capital" shall not, in its application to this regulation, include debenture, preference shares, non-voting shares and any paid up capital subscribed, directly in itself, by the insurer.

   (3) An insurer shall always designate twenty percent of net profit to the paid up share capital before the dividend for each year is declared by the company.

[13]

15.   Maintenance of security deposit

   (1)(a)   Every insurer shall establish and maintain, at the Bank of Tanzania, a security deposit of at least fifty (50) percent of the prescribed minimum paid up capital of the Company;

   (b)   the deposit made under this section shall be considered as part of the assets in respect of the capital of the insurer;

   (c)   the deposits made under paragraph (a) shall be invested by the Central Bank in short term investments securities as proposed by insurer and approved by the Central Bank and the Central Bank shall issue a certificate of such investment to every insurer who has deposited money with the Central Bank in accordance with the provisions of this section;

   (d)   all income accruing from a deposit made under this section shall be payable to the insurer making the deposit.

   (2) The security deposit made under subsection (1) shall be available to the insurer in the following circumstances–

   (a)   where an insurer suffers a substantial loss arising from liability to claimants and the loss is such that it cannot be met from its available resources, the Commissioner of Insurance may after ascertaining the nature of the claim and upon application made by the insurer, approve the withdrawal from the security deposit of the insurer an amount of not more than fifty (50) percent of the security deposit and any amount withdrawn shall be replaced by the insurer not later than ninety days after the date of the withdrawal;

   (b)   in the event of closure or winding-up of the insurance business, security deposit shall first be utilised for the discharge of any liabilities arising out of policies transacted by the insurer which are undischarged at the time of closure or winding up of the insurance business.

   (3) The balance of fifty (50) percent of the minimum paid up share capital shall be dealt with in accordance with the provisions of Regulations 33 or 34, depending on the type of insurance business being transacted by the Insurers.

[13A]

16.   Insurer's margin of solvency

   (1) The margin of solvency required pursuant to section 121 of the Act shall be as follows:

   (a)   the assets of an insurer transacting classes of general business shall exceed all the liabilities of the company by T.Shs. 250,000,000.00 or twenty percent of the net premium income of the insurer, whichever is the greater;

   (b)   the assets of an insurer transacting classes of long term business shall exceed all the liabilities of the company by T.Shs. 250,000,000.00 including any liability, attributable to any life insurance fund established by the said insurer; and

   (c)   the assets of an insurer transacting classes of both general and long term business shall exceed all the liabilities of the company by T.Shs. 500,000,000.00.

   (2) For the purpose of this Regulation the net premium income in any period in question of an insurer transacting classes of general business shall be the gross premium income of the said insurer less the gross premium of such insurer for reinsurance of the business to which the gross premium is attributable at the time in question.

   (3) Where any Director or the management of any Tanzanian insurer transacting classes of general business believes that the solvency margin of the company in any case is less than thirty percent as calculated under subregulation 14(1)(a) for whatever reason, the Commissioner and all Directors of the insurer shall be so informed in writing immediately.

[14]

17.   Calculation of assets and liabilities of general insurer

   (1) In calculating the value of its assets, whether owned directly in or through a subsidiary or associate, an insurer transacting general business shall–

   (a)   ascribe a monetary value to those assets which represent the net sale value of the assets after deducting all reasonable anticipated costs incurred in the sale or realisation of those assets;

   (b)   where the asset is land in Tanzania with structures and buildings on it, have that asset valued by an independent property valuer resident in Tanzania and approved by the Commissioner;

   (c)   for the purpose of solvency calculation into account only the total of the admissible assets as defined in Form No. 11 which is set out in the First Schedule.

   (2) In calculating the extent of its future liabilities under all classes of general business an insurer shall–

   (a)   incorporate a provision for liabilities net of anticipated reinsurance recoveries of policies already entered into but not yet expired; such provision shall be made using the standard twenty fourths methods of calculating those liabilities, or an internationally recognized formula or basis approved by the Commissioner. In the calculation of this liability the gross premiums may be reduced only by the gross commissions paid to intermediaries;

   (b)   incorporate a provision for liabilities net of anticipated reinsurance recoveries of claims advised although all or some part of the payment has yet to be made; such provision shall be made on appraisal by experienced staff of all outstanding claim files in determining the realistic monetary sum of the insurer's anticipated potential liabilities and anticipated recoveries other than from the sale of salvaged goods already in the possession of the insurer which shall not be taken into account in calculating the liabilities of the insurer;

   (c)   incorporate a provision for liabilities net of anticipated reinsurance recoveries of policies under which liability has arisen to the insurer and the extent of which has yet to be ascertained by the insurer; such provision shall be made using a formula or basis approved by the Commissioner, but such provision shall not be less than fifteen percent of total incurred claims in the previous financial year less actual and anticipated reinsurance recoveries in respect of those claims;

   (d)   where the liability of an insurer is denominated or arises in a foreign currency, incorporate a provision for possible adverse currency movements as the insurer shall deem appropriate;

   (e)   incorporate a provision for anticipated administration costs of the insurer in the handling and settlement of claims included in paragraph (b) and (c);

   (f)   in the calculation of solvency take into account any other liabilities which are set out in Form No. 10 in the First Schedule.

[15]

18.   Calculation of assets and liabilities of long term insurer

   (1) In calculating the value of its assets, whether owned directly in or through a subsidiary or associate, an insurer's long term business shall–

   (a)   include all assets and liabilities of statutory life insurance funds;

   (b)   ascribe a monetary value to those assets which represents the net sale value of the assets after deducting all reasonable anticipated costs incurred in the sale or realisation of those assets;

   (c)   where the asset is land in Tanzania with structures and buildings on it, have that asset valued by an independent property valuer resident in Tanzania and approved by the Commissioner; the valuation shall be undertaken not less frequently than every three years;

   (d)   where the assets are shares held in a subsidiary company whose assets are made up of land or buildings, or an interest in land or building, value the shares at the net sale value of that property as determined under paragraphs (b) and (c) less the liabilities of the company including any taxation liabilities upon the sale of those assets;

   (e)   where the assets are shares held in a subsidiary company other than as described in paragraph (d) or of any other shares held by the insurer, value those shares at the open market sale price less all reasonable anticipated costs incurred in the sale of the shares;

   (f)   for the purpose of solvency calculation, take into account only the total of admissible assets which are defined in Form No. 11 which is set out in the First Schedule.

   (2) In calculating the extent of its future liabilities under all classes of long term business such insurer shall–

   (a)   utilize the valuation of the liabilities for each of the statutory life insurance funds established pursuant to section 76 of the Act as determined by the actuary at an investigation carried out in accordance with section 75 of the Act; and

   (b)   adjust the liabilities which have been incurred since the last actuarial investigation only in accordance with the formula or basis which the actuary shall approve;

   (c)   in the calculation of solvency margin take into account any other liabilities which are set out in Form No. 10 which is set out in the First Schedule.

[16]

19.   Calculation of assets and liabilities of both general and long term insurance

   (1) An insurer carrying on both long term and general insurance business shall at all times maintain separate margins of solvency in accordance with regulations 17 and 18; save that, assets other than those representing the fund or funds maintained by the insurer in respect of his long term insurance business, if they are not included among the assets covering the liabilities and the margin of solvency relating to the insurer's general insurance business, may be included among the assets taken into account in covering the liabilities and margin of solvency for the insurer's long term insurance business.

   (2) For the purposes of this Regulation, in case of long term insurance business the amount of the liabilities of that business at any time shall be–

   (a)   an amount equal to the total amount at that time standing to the credit of the statutory fund or funds maintained by the insurer in respect of his long term insurance business; or

   (b)   the amount of those liabilities at that time as determined by an investigation performed in accordance with section 75 of the Act and approved by the Commissioner, whichever is greater.

[17]

20.   Paid up capital for brokers, loss adjusters, etc.

   (1) The minimum paid up capital for an insurance broker pursuant to section 54(2) of the Act shall be ten million shillings (T.Shs. 10,000,000,00).

   (2) The minimum paid up capital loss adjusters, insurance surveyors and risk managers shall be two million shillings (T.Shs. 2,000,000,00).

[18]

PART VI
INSURERS' ACCOUNTS AND RETURNS (regs 21-25)

21.   Insurer's account

   (1) For the purposes of section 26(2) of the Act, the account of an insurer shall be extended to include the following additional information–

   (a)   the margin of solvency as shown on Form No. 10 set out in the First Schedule as–

      (i)   the amount of Tanzania shillings by which the total admissible assets exceed the total net liabilities;

      (ii)   the amount of Tanzania shillings by which the total admissible assets exceed the sum of the total net liabilities and the margin of solvency as set out in Regulation 16(1);

      (iii)   the percentages that the amounts of Tanzania shillings in subparagraphs (i) and (ii) above bear to the total admissible assets;

   (b)   the number of shares of the insurer, or of any company of which the insurer is a subsidiary, held by each director of either and the number of shares bought and sold by each director during the accounting period in question;

   (c)   the total aggregate amount paid to directors including all fees, remuneration, pension contributions and all other benefits but excluding the reimbursement of expenses directly incurred in the business of the insurer and of the highest aggregate amount paid to one director;

   (d)   a statement on the basis, if any, of revaluation or depreciation of land on building owned by it or by any subsidiary and associate companies, such statement shall state whether real property has been re-valued or is included in the accounts at purchase cost value, and if re-valued, the basis of the revaluation and the date on which it was revalued;

   (e)   where the insurer owns in excess of twenty percent of the equity stock in any other company the company's name, country of incorporation or registration, principal business activity and percentage of stockholding of each such company shall be stated;

   (f)   a statement of the total contributions made to charitable institutions or political parties during the year and of the highest aggregate amount paid to one institution or party.

   (2) The accounts of an insurer shall be extended to include a declaration that, where any transfer of assets has been made during the period in question between an insurer transacting classes of long term business and a statutory life insurance fund maintained by it as permitted under section 76(1) of the Act, each such transfer had been examined by the Auditor and the transfer, in the opinion of the Auditor was, or was not, executed at fair market value.

[19]

22.   Separation of accounts

   (1) For the purposes of section 76(3)(b) of the Act, an insurer carrying on long term insurance business shall maintain separate accounts in respect of the classes of long term insurance business.

   (2) An insurer carrying on general insurance business shall maintain separate accounts in respect of the classes of business listed in the Second Schedule to the Act.

[20]

23.   Insurer's reserves

   (1) An insurer shall establish and maintain in respect of each class of insurance business the following reserves–

   (a)   reserves for unexpired risks;

   (b)   reserves for outstanding claims; and

   (c)   contingency reserves to cover fluctuations in securities and variation in statistical estimates.

   (2) An insurer shall maintain with respect to non-life insurance business the following reserves–

   (a)   in case of non-life insurance business other than Marine Insurance business, the reserves for unexpired risks, amounting to not less than forty-five percent of the total net premiums;

   (b)   in the case of Marine Insurance business the reserves for unexpired risks amounting to not less than seventy-five percent of the net premiums;

   (c)   in the case of reserves for outstanding claims, the reserves shall be equal to the total estimated amount of all outstanding claims together with a further amount representing twenty percent of the estimated amount of outstanding claims in respect of claims incurred but not reported at the end of the last preceding year; and

   (d)   in the case of contingency reserves, reserves which shall not be less than three percent of the total premium or twenty percent of the net profits whichever is the greater and that amount shall accumulate until it reaches the minimum paid up capital or fifty percent of the net premium whichever is the greater.

   (3) An insurer shall maintain with respect to long term insurance, the following reserves–

   (a)   a general reserves fund which shall be credited with an amount equal to the net liabilities on policies in force at the time of the actuarial valuation; and

   (b)   contingency reserves which shall be credited with an amount equal to one percent of the premiums.

[21]

24.   Annual returns of insurers

   Annual returns to be furnished by every insurer to the Commissioner pursuant to section 30 of the Act shall in the case of–

   (a)   a balance sheet be prepared by the company and audited by an Auditor approved by the Commissioner as required under section 26 of the Act and shall be in Form No. 6 and as is required by recognised international accounting standards or as is required by the Act, these regulations or any other relevant law of Tanzania;

   (b)   a profit and loss account be prepared by company and audited by an Auditor approved by the Commissioner as required under section 26 and shall be in Form No. 7 and as is required by recognised international account standards or as is required by the Act, these regulations or any other relevant law of Tanzania;

   (c)   an audited income and expenditure statement for each category or group of categories, of insurance underwritten by an insurer transacting long term insurance business, be in Form No. 9 set out in the First Schedule;

   (d)   an audited statement of all admissible and all inadmissible assets, be in Form No. 11 set out in the First Schedule.

[22]

25.   Code of Practice for Insurers

   The Code of Practice which shall guide Insurers in the conduct of their business is set out in the Second Schedule.

[23]

PART VII
BROKERS' ACCOUNTS AND RETURNS (regs 26-32)

26.   Broker's accounts

   (1) For the purpose of section 58(2) of the Act, the accounts of a broker shall be extended to include the following additional information–

   (a)   the number of commission only agents employed by the broker;

   (b)   the sums paid and incurred by the broker in respect of agents and staff pursuant to section 55(1) of the Act;

   (c)   the total of sums paid or incurred by the broker in respect of premiums due to Tanzania Insurers for which no, or inadequate, recompense had been received from clients pursuant to section 57 of the Act;

   (d)   the number of occasions that the broker has submitted explanations to the Commissioner, as required under section 64(1) of the Act, in respect of practices discouraged by the brokers code of conduct;

   (e)   the total premiums remitted, without deducting commission earned, in respect of insurances placed overseas (other than reinsurances placed on behalf of a Tanzania Insurer) pursuant to section 112 of the Act.

   (2) The accounts of a broker shall be extended to include the Auditor's opinion on whether–

   (a)   the relevant bank deposits and capital requirements as required by section 54(2) of the Act have been complied with by the broker;

   (b)   the trust accounts maintained pursuant to section 57(3) and (4) of the Act are correctly operated;

   (c)   the insurances required under section 57(1) of the Act are so maintained and in operation.

[24]

27.   Annual returns of broker

   Annual returns to be furnished by every broker to the Commissioner pursuant to section 61 shall in the case of–

   (a)   a balance sheet and prepared by the company and audited by an Auditor approved by the Commissioner as required under section 58(1) and shall be in such form as is required by recognised international accounting standards or as is required by the Act, these regulations or any other relevant law of Tanzania;

   (b)   an audited insurance premium income and expenditure statement, be in Form No. 5 set out in the First Schedule.

[25]

28.   Broker's minimum indemnity

   The Commissioner may require a broker to provide a minimum indemnity in a sum not less than fifty million shillings (T.Shs. 50,000,000.00) in a manner approved by the Commissioner.

[26]

29.   Broker's security deposit

   (1) The Commissioner may require a broker to deposit either in money or in stipulated securities, security in a value of twenty five million shillings (T.Shs. 25,000,000.00) in a trustee bank to be approved by the Commissioner.

   (2) Withdrawal of the deposit shall be effected with the written approval of the Commissioner.

[27]

30.   Broker's guarantee

   The guarantee under section 57(3) of the Act shall in respect of the premium receipt less commissions received by the broker for the previous year be–

   (a)   for any sums which do not exceed 2,500,000,000.00 shillings, fifty percent of premium receipts less commissions received by the broker for the previous financial year; and

   (b)   for any sum which exceed 2,500,000,000.00 shillings but not exceed 7,500,000,000.00 shillings, twenty-five percent of premium receipts less commissions received by the broker for the previous financial year;

   (c)   for any sums which exceed 7,500,000,000.00 shillings, ten percent of premium receipts less commissions received by the broker for the previous financial year.

[28]

31.   Remittance of premium by broker

   A broker shall pursuant to section 57(2) of the Act, remit to the insurer all premiums due to the insurer within sixty (60) days of the last day of the calendar month in which cover under the policy incepted or the date on which the policy is renewable or in which an endorsement was made.

[29]

32.   Brokers Code of Conduct

   The Code of Conduct which shall guide insurance brokers in the conduct of their business is set out in Part B of the Second Schedule.

[30]

PART VIII
PERCENTAGE OF ASSETS TO BE HELD IN APPROVED TANZANIAN SECURITIES (regs 33-34)

33.   Long term insurance

   (1) Twenty percent of insurance funds of an insurer carrying on long term insurance business under section 32(1) of the Act shall be invested and kept invested in one or more of the following:

   (a)   Government securities;

   (b)   Bank of Tanzania;

   (c)   prescribed statutory bodies;

   (d)   local authorities;

   (e)   any other prescribed organisation.

   (2) A further proportion, amounting to not less than fifty percent (50%), shall be invested in one or more of the following investments–

   (a)   the securities set out in subregulation (1);

   (b)   mortgages on unencumbered immovable property in Tanzania;

   (c)   debentures secured by a mortgage on unencumbered immovable property in Tanzania;

   (d)   instruments of title on immovable property in Tanzania;

   (c)   deposits in banks or financial institutions licensed under the Banking and Financial Institutions Act, 1991.

   (3) Where the insurer carries on long term insurance business, the deposits in any one bank or financial institution shall not exceed five percent of the total value of the assets of the insurer relating to the business.

[31]

34.   General insurance

   (1) At least twenty percent of total assets of General Insurance business shall be invested in securities such as the Government securities.

   (2) A further portion amounting to not less than thirty percent shall be invested in securities like bank deposits except that deposit in any one bank shall not exceed ten percent of the total value of the assets of the insurer.

   (3) No insurer shall in respect of its general insurance business invest more than twenty-five percent of its assets in real estate.

   (4) A deposit in any bank or financial institution of an Insurer carrying on general insurance business shall not exceed ten percent (10%) of the total value of the assets of the insurer relating to that business.

[32]

PART IX
RESTRICTION OF PLACEMENT OF INSURANCE BUSINESS OUTSIDE TANZANIA (reg 35)

35.   Insurance to be held with Tanzanian Insurers

   (1) For the purposes of section 111 of the Act, any insurance in respect of which a risk may arise in Tanzania, shall be placed with a Tanzanian Insurer.

   (2) Where a class of insurance required to be placed with a Tanzania insurer under subsection (1) is not available to a person seeking insurance, that person may place that insurance with a non-resident insurer after obtaining the prior written approval of the Commissioner.

   (3) The Commissioner shall not approve a request referred to in subregulation (20) unless he is satisfied that there is no registered insurer who is able to provide adequate insurance cover in respect of the risk or class of risk to which the request relates.

[33]

PART X
NATIONAL INSURANCE BOARD (reg 36)

36.   Conduct of the business of the Board

   For the purposes of administrative arrangements of the National Insurance Board appointed by the Minister under section 6(2) of the Act, the Board shall conduct its businesses in the following manner–

   (a)   the Board shall meet for the discharge of its functions as often as business requires and in any case the Board shall meet at least once in three months and the Chairman shall convene a meeting where at least three members of the Board request in writing for a meeting;

   (b)   the Chairman or Deputy Chairman shall preside at all meetings of the Board and in the absence of both, members shall elect one of the member to preside at the meeting;

   (c)   the Chairman shall not be a person connected with any insurer, broker or agent;

   (d)   the quorum at any meeting of the Board shall be four;

   (e)   a decision of a question at any meeting of the Board shall be determined by a simple majority of the members present and voting and in case of equality of votes any person presiding at the meeting shall have a casting vote;

   (f)   the Board shall cause to be kept minutes of all the proceedings of its meeting;

   (g)   a member of the Board who has any personal interest in any transaction or matter before the Board, shall disclose the nature of his interest to the Board and shall if it is a contract be disqualified from taking part in the deliberation of the Board with respect to that transaction or matter and in any other case, the Board shall decide whether the nature of interest might prejudice the considerations of the matter;

   (h)   members of the Board shall be paid reasonable travelling and subsistence allowances as may be approved by the Minister;

   (i)   members of the Board shall hold office for a period of three years and a member shall be eligible for re-appointment for a further unrenewable period of three years;

   (j)   a member of the Board may resign by writing to the appointing authority.

[34]

PART XI
MISCELLANEOUS PROVISIONS (regs 37-39)

37.   Actuary's abstract on investigation

   An abstract submitted by an actuary on completion of an investigation made under section 75 of the Act shall be in Form No. 12 set out in the First Schedule.

[35]

38.   Friendly societies

   For the purposes of section 15 of the Society Act, benefits provided by a society not exceeding in aggregate amount 1,000,000.00 shillings shall not be subject to the provisions of the Act.

[36]

39.   Fees

   Fees payable for the purpose of section 134 of the Act are set out in the Third Schedule.

[37]

FIRST SCHEDULE
FORMS

FORM NO. 1
APPLICATION FOR REGISTRATION AS AN INSURER
BY THE .................. LIMITED

THE UNITED REPUBLIC OF TANZANIA

Address of Insurer


.........................................
.........................................
.........................................

Date ...................... 20.......

To - The Commissioner of Insurance
P.O. Box 9111
DAR ES SALAAM
TANZANIA

   1.   I/We apply for registration of the 1 ......................................................................
........................................................... under section 17 as an insurer resident in
Tanzania.

   2.   The registered office of the Company will be at 2
........................................................................................................................

   3.   The head office of the Company will be at 3
........................................................................................................................

   4.   The person managing the business of the Company will be 4
.......................................................................................................................

   5.   The Principal Officer of the Company is 5
.......................................................................................................................
of address .......................................................................................................

   6.   The Auditor of the Company is 6
.......................................................................................................................
of address 7 .....................................................................................................
.......................................................................................................................

   7.   The actuary to the Company is 8
........................................................................................................................
of address ........................................................................................................

   8.   The amount of authorised share capital of the Company is ............................ T.Shs.
The total amount of issued and paid-up share capital (excluding preference shares and non-voting shares of the Company) is ............................................ T.Shs. 9

   9.   The amount of issued and paid-up preference shares and non-voting shares of the Company is ......................................... T.Shs. 10

   10.   The month and day of the financial year end is .................................................. 11

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