Insurance Proposal Form (Kenya)

An Insurance Proposal Form in Kenya organises the details a party must supply for the purpose it serves.

The Insurance Proposal Form Kenya constitutes an offer by the proposer to the insurer. The legal principle of uberrimae fidei — utmost good faith — applies to all insurance contracts in Kenya as a matter of common law incorporated into Kenyan jurisprudence and reinforced by the Insurance Act Cap. 487. Section 158 of the Insurance Act Cap. 487 imposes on the proposer an absolute duty to disclose all material facts that would influence a prudent underwriter in deciding whether to accept the risk and on what terms. Failure to disclose a material fact — whether intentional or inadvertent — entitles the insurer to avoid the policy from inception, rendering any claims void ab initio.

The Insurance Regulatory Authority of Kenya (IRA), established under Section 3A of the Insurance Act Cap. 487, licenses and supervises all insurance companies, reinsurance companies, insurance brokers, insurance agents, loss assessors, and risk managers operating in Kenya. The IRA publishes market conduct guidelines that govern the format and content of proposal forms, the disclosures required from proposers, and the obligations of insurers in processing applications. The Insurance (Motor Vehicle Third Party Risks) Act Cap. 405 makes motor insurance compulsory for all motor vehicles used on public roads in Kenya, and the proposal form for motor insurance must comply with both Cap. 487 and Cap. 405.

The Insurance Act Cap. 487 underwent significant amendment through the Finance Act 2022 and the Insurance (Amendment) Act 2019, which strengthened the IRA's supervisory mandate, introduced risk-based capital requirements for insurers, and enhanced consumer protection obligations including the duty to provide pre-contractual information to proposers. Under the Insurance (Amendment) Act 2019, Section 33A requires insurers to provide a Key Information Document (KID) to every proposer before the proposal form is completed, summarising the nature of the cover, exclusions, and premium basis.

The Unclaimed Financial Assets Authority (UFAA) Act No. 40 of 2011 is relevant to insurance in Kenya because unclaimed insurance policy benefits are remitted to the UFAA after three years of remaining unclaimed, underscoring the importance of accurate beneficiary and contact information in the proposal form. The Insurance Fraud Investigations Unit (IFIU), established under the Insurance Act, investigates fraudulent proposal declarations, and intentional misrepresentation on a proposal form constitutes the criminal offence of insurance fraud under Section 200 of the Insurance Act Cap. 487, punishable by imprisonment not exceeding two years or a fine not exceeding KES 500,000 or both.

At forms-legal.com, the Kenya Insurance Proposal Form template captures all standard fields required by licensed insurers operating under the IRA framework, including proposer identification, risk description, claims history, and the mandatory declaration of utmost good faith, making it suitable for submission to any IRA-licensed general insurer in Kenya.

A Kenya Insurance Proposal Form is required every time a person or business seeks to obtain a new insurance policy from an IRA-licensed insurer, whether for motor vehicles, property, liability, personal accident, or miscellaneous general insurance cover.

A Kenya Insurance Proposal Form is needed when purchasing compulsory motor vehicle third-party insurance under the Insurance (Motor Vehicle Third Party Risks) Act Cap. 405. Every motor vehicle owner in Kenya must have at minimum a third-party motor insurance policy, and the insurer must receive a completed proposal form before issuing a Certificate of Insurance and a cover note. The National Transport and Safety Authority (NTSA) requires proof of valid insurance during motor vehicle inspection and registration renewal.

A Kenya Insurance Proposal Form is required when a business owner seeks to insure commercial premises, stock, or equipment against fire, burglary, or business interruption. Mortgage lenders and commercial banks in Kenya typically require borrowers to maintain property insurance, and the lender's interest must be noted on the proposal form to enable the insurer to record the bank as a co-insured or loss payee.

A Kenya Insurance Proposal Form is needed when an employer purchases Group Personal Accident or Group Life insurance to comply with employment obligations or as part of an employee benefits package. The Workmen's Compensation Act Cap. 236 (now replaced by the Work Injury Benefits Act No. 13 of 2007, administered by the Directorate of Occupational Safety and Health Services under the Ministry of Labour) requires employers to cover workers against work-related injuries, and a proposal form initiates this cover.

A Kenya Insurance Proposal Form is required when a contractor, engineer, or professional seeks professional indemnity or engineering erection all-risks insurance for a construction project. Public procurement regulations under the Public Procurement and Asset Disposal Act No. 33 of 2015 commonly require bidders to demonstrate insurance coverage as a condition of contract award, and the proposal form creates the policy that satisfies this requirement.

A Kenya Insurance Proposal Form is needed when renewing an existing policy where material changes have occurred — such as a new vehicle, change of use, renovation of insured premises, or change in business activities — that require the insurer to re-underwrite the risk on the basis of updated information.

A Kenya Insurance Proposal Form under the Insurance Act Cap. 487 must contain the following essential elements to satisfy the requirements of the Insurance Regulatory Authority and to create a valid and enforceable insurance contract.

Proposer Identification: Full legal name of the individual or corporate entity seeking insurance; National Identity Card (NIC) number for individuals or Certificate of Incorporation and Business Registration Service (BRS) number for companies; physical and postal address; telephone number; email address; and Kenya Revenue Authority (KRA) PIN, which is required for tax compliance under the Income Tax Act Cap. 470 for premium withholding tax purposes.

Class of Insurance and Risk Description: The specific class of general insurance sought — motor, fire, burglary, personal accident, public liability, engineering, marine, or miscellaneous — must be identified. For motor insurance, the vehicle registration number, make, model, year of manufacture, chassis number, engine number, cubic capacity, and market value must be stated. For property insurance, the location, construction type, age of building, occupancy, and sum insured must be described with sufficient particularity to enable underwriting.

Previous Insurance History: Details of the proposer's existing or most recent insurance policy — insurer name, policy number, period of cover, premium paid, and whether the policy was cancelled, declined, or subjected to special conditions — must be disclosed. Claims history for the preceding three to five years, including the nature, date, and amount of each claim, is a material fact that must be declared under the uberrimae fidei principle and Section 158 of the Insurance Act Cap. 487.

No-Claims Discount Certification: For motor insurance, the proposer must declare the no-claims discount (NCD) earned under the previous policy. The IRA Motor Insurance Guidelines require insurers to verify NCD claims before granting discounts, and misrepresentation of NCD entitles the insurer to avoid the policy.

Sum Insured and Basis of Valuation: The proposed sum insured, whether on a reinstatement basis (cost of rebuilding or replacing the insured property) or an indemnity basis (market value at time of loss), must be specified. Under-insurance clauses (average clauses) are standard in Kenyan fire and property policies and will reduce claim payments proportionately if the sum insured is less than the full value.

Special Conditions and Endorsements: Any warranty, condition precedent, or endorsement requested by the proposer — such as windscreen cover, political violence cover, all-risks extension, or named driver restriction for motor policies — must be noted on the proposal form.

Declaration and Signature: The proposal form must end with a formal declaration by the proposer confirming that all statements are true and complete, that no material facts have been concealed, and that the proposer agrees that the proposal form forms the basis of the contract of insurance. The declaration must be signed and dated by the proposer or an authorised representative. The forms-legal.com Kenya Insurance Proposal Form template includes the IRA-compliant declaration clause and all standard sections required by licensed general insurers operating under Insurance Act Cap. 487, covering motor, fire, burglary, personal accident, and public liability classes, with the mandatory disclosure of claims history and prior insurance details.

Premium Basis and Payment: The proposed premium payment method — annual, semi-annual, or quarterly instalment under IRA premium financing guidelines — and the bank account or M-Pesa number for premium direct debit must be recorded. The Insurance Regulatory Authority has issued guidelines on premium payment terms that prohibit insurers from providing cover where premium is not paid within the credit period, reinforcing the importance of accurate payment details on the proposal form.