ACT ii

Supplement to the Sierra Leone Gazette Vol. CXLVII, No. 34

23. Building Insurance
dated 21st July, 2016 24. Classes of Insurance Business.
25. Prohibition of transaction of insurance business by certain persons.
THE INSURANCE ACT, 2016 26. Capital requirements.
27. Deposits.
ARRANGEMENT OF SECTIONS 28. Reservation of and withdrawal from deposit.
29. Refund of deposit.
Section. 30. Grant of certificate of registration.
31. Appeal to High Court.
PART 1–PRELIMINARY 32. Renewal of registration.
33. Cancellation of registration.
1. Interpretation. 34. Alterations in particulars to be reported.
35. Margin of solvency.
PART II – ESTABLISHMENT OF SIERRA LEONE INSURANCE COMMISSION 36. Life insurance fund and its control.
37. Reserves.
2. Establishment of Sierra Leone Insurance Commission. 38. Dividends.
3. Object and functions of Commission. 39. Restriction on credit.
4. Composition of Commission.
5. Meetings etc, of Commission. PART IV – RECORDS, ACCOUNTS AND RETURNS
6. Disclosure of interest.
7. Committees of Commission. 40. Separation of accounts.
8. Commissioner of Insurance, Deputy Commissioner of Insurance. 41. Accounts to be furnished.
9. Secretary and other staff of Commission. 42. Records to be kept by foreign insurers.
10. Funds of Commission. 43. Accounts and statements submitted by foreign insurers in their country of
11. Borrowing powers. domicile.
12. Accounts and audit. 44. Certificate that foreign insurer has complied with the requirements and law
13. Annual report. in country of domicile.
14. Financial year of commission. 45. Consolidated accounts of insurers who are holding companies or
15. Transfer of assets and liabilities. subsidiaries.
46. Reports made to share-holders or policy-holders and abstract of meetings.
PART III – REGISTRATION OF INSURERS 47. Certificate relating to account statement.
48. Auditor to send copy of Report made to Management to Commissioner.
16. All insurers to be registered. 49. Amendment and correction in accounts returns.
17. Failure to register not to invalidate contract. 50. Actuarial reports and abstracts.
18. Application for registration. 51. Minimum basis of valuation of liabilities.
19. Registration of insurers. 52. Revaluation of liabilities.
20. Protection and indemnity club to be registered. 53. Authentication of accounts and abstracts.
21. Compulsory tenantable/ public properties insurance. 54. Inspection of documents and supply of copies.
22. Employer’s liability insurance. 55. Evidence of documents.
56. Qualification of Actuaries.
 iii iv

80. Qualifications of insurance brokers and adjusters.

PART V – INVESTMENTS BY INSURANCE COMPANIES 81. Cancellation of registration.
57. Investments. 82. Application for registration as insurance intermediary.
58. Statement of investment of assets and liabilities relating to life insurance 83. Records to be kept by insurance intermediaries.
business. 84. Powers of Commissioner to investigate insurance intermediaries.
59. Verification of assets.
60. Prohibition of loans to Directors. PART X – PROVISIONS RELATING TO POLICY CONTRACTS

PART VI – INVESTIGATION OF INSURERS 85. Jurisdiction of local courts in respect of insurance policies.
86. Policy not invalid owing to failure to comply with law.
61. Commissioner to investigate affairs of insurers. 87. Distribution of profits of life insurance policies.
62. Inspection of books, documents, etc. 88. Rights of holders of life insurance policies.
63. Power to call for information. 89. Assignment of life insurance policies.
90. Penalty for false statement.
PART VII – AMALGAMATION, TRANSFERS, AND WINDING –UP 91. General provisions relating to penalties and offences.
92. Prosecution of offences.
64. Transfer of life insurance policies. 93. Power of court to grant relief.
65. Statement after amalgamation or transfer. 94. Action of Commission etc., to be reviewed.
66. Margin of solvency.
67. Winding-up. PART XI – MISCELLANEOUS
68. Voluntary winding-up.
69. Rules relating to winding-up. 95. Publication of registration and cancellation of registration in the Gazette.
70. Right of hearing of Commissioner. 96. Insurers to be subject to this Act while liabilities remain unsatisfied.
71. Control over liquidators. 97. Exemption from Act to certain insurers ceasing to transact business.
98. Similarity of names of insurers.
PART VIII – REINSURANCE BROKERAGE 99. Service of notice.
100. Reserves of reinsurers.
72. Reinsurance License. 101. Service of process upon insurer.
102. Restriction on the use of the word insurance.
103. Summary of returns to be published.
PART IX - REGISTRATION OF INSURANCE AGENTS, CHIEF AGENTS, 104. Advertisements.
BROKERS, ADJUSTERS AND ASSESSORS 105. Exceptions.
106. Properties and liabilities to be insured in Sierra Leone.
73. Insurance agents and assessors to be licensed. 107. Insurance of imports to be effected in Sierra Leone.
74. Holder of licence to work for specified insurers. 108. Compulsory indeminity insurance for certain proffessionals
75. Disqualification of insurance agents, etc. 109. Commission to delegate functions.
76. Filing contracts with the Commissioner. 110. Regulations.
77. Regulation of contracts of agents. 111. Repeal.
78. Power to call for information from agents. 112. Transitional Provision.
79. Registration of insurance intermediaries.
64 No. 12 Insurance Act 2016

SIGNED this 12th day of July, 2016.

Passed in Parliament this 21st day of April , in the year of our Lord two
thousand and sixteen.
DR. ERNEST BAI KOROMA,
President.
IBRAHIM S. SESAY,
Clerk of Parliament. LS

THIS PRINTED IMPRESSION has been carefully compared by me with the Bill
which has passed Parliament and found by me to be a true and correct printed copy
of the said Bill.

No. 12 2016

IBRAHIM S. SESAY,
Clerk of Parliament. Sierra Leone

The Insurance Act, 2016 Short title.

Being an Act to continue in existence the Sierra Leone

Insurance Commission and to regulate the business of insurance
in Sierra Leone.

[ ] Date of com-
mencement.

ENACTED by the President and Members of Parliament in this

PRINTED AND PUBLISHED BY THE GOVERNMENT PRINTING DEPARTMENT, SIERRA LEONE. present Parliament assembled.
GAZETTE NO. 34 OF 21ST JULY, 2016.
2 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 3

PART I – PRELIMINARY (vi) subject to any agreement in this behalf

, acts as the representative of the insurer
Interpretation. 1. In this Act , unless the context otherwise requires- in Sierra Leone or any well defined
geographical area forming part of Sierra
“adjuster” means a person duly registered to undertake Leone
professional insurance adjusting business for or on
behalf of an insurer, an insured or any other person; “Commission” means, the Sierra Leone Insurance
Commission referred to in section 2 of the Act;
“approved securities” means securities issued by the
Government of Sierra Leone or guaranteed as to “company” has the meaning assigned to it under the
principal and interest by the Government; Companies Act No. 5 of 2009;

“certified” in relation to any copy or translation of a “domestic insurer” means an insurer incorporated
document required to be furnished by or on behalf under the Companies Act, or under any law for the
of an insurer means certified by the principal officer time being in force in Sierra Leone;
or principal representative as the case may be, of
such insurer to be a true copy or correct translation; “director” means any person occupying the position
of director of a body corporate by whatever name
“chief agent” means a person who, with the authority called;
of an insurer, or on his behalf –
“financial year” in relation to domestic insurer or in
(i) initiates insurance business either relation to the business of a foreign insurer in Sierra
directly or through insurance agents Leone means the calendar year ending on 31 st
and receives proposals either directly December and in relation to foreign insurers in respect
or through insurance agents; of the accounts for the total business means the
period not exceeding twelve months at the end of
(ii) supervises the activities of insurance which accounts of the insurer is balanced;
agents;
“fire insurance business” means the business of
(iii) collects premium from the insured and effecting otherwise than incidentally to some other
insurance agents; class of insurance business, contracts of insurance
against loss by or incidental to fire or other
(iv) settles claims arising out of policies of occurrence customarily included among the risks
insurance subject to any agreement in insured against in fire insurance policies;
this behalf;
“foreign insurer” means an insurer incorporated under
(v) disburses the commission due to the law of any country other than Sierra Leone;
insurance agents;
4 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 5

“general insurance business” means fire, marine, motor “insurance intermediary” includes an insurance broker
or miscellaneous insurance business whether carried and adjuster;
on singly or in combination with one or more of them
but excludes life insurance business and long term “insurer” means a person carrying on insurance
insurance business; business otherwise than as an insurance agent,
special agent or chief agent;
“industrial life insurance business” means the
business of life insurance where the insurer expressly “life insurance business” includes industrial life
or tacitly undertakes to send a person to the owner insurance business and ordinary life insurance
of the policy at his residence or place of work to business and means the business of effecting
collect the premium, and where the frequency of contracts of insurance upon human life including
payment of premium is not less than twelve times a any contract whereby the payment of money is
year at intervals not exceeding a month, and where assured on death (except policies for death by
the sum insured, or the amount of the annuity per accident only) or the happening of any contingency
annum does not exceed such sum as may be notified dependent on human life or which is subject to
in the Gazette by the Minister; payment of premiums for a term dependent on human
life and includes–
“insurance agent” means, in respect of life insurance
business an individual and in respect of general (a) the granting of disability and double or triple
insurance business a person who, with the authority indemnity accident benefits if so provided in
of an insurer acts on his behalf in the initiation of the contracts of insurance;
insurance business, the receipt of proposals and,
subject to written authority by the insurer, to collect (b) the granting of annuities upon human life;
premiums on his behalf; and

“insurance broker” means a person who acts as an (c) the granting of superannuation and annuities
independent contractor for commission or other payable out of any fund applicable solely to
compensation and not being an agent of the insurer, the relief and maintenance of persons
solicits or negotiates insurance business on behalf engaged or who have been engaged in any
of an insured or prospect in reinsurance business; particular profession, trade or employment
or of the dependants of such persons;
“insurance business” means the assumption of the
obligation of an insurer or reinsurer in the case of “life insurance fund” or “life fund” means the fund to
insurance business or reinsurance business as the which the receipts of an insurer in respect of his life
case may be; insurance business are carried and from which
payments in respect of that business are made;
6 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 7

“life insurance policy” means an ordinary life “Minister” means the Minister responsible for finance;
assurance policy or industrial life assurance policy;
“miscellaneous insurance business” means the
“long term insurance business” includes the business business of effecting contracts of insurance which
of– is not principally of any kind included in life insurance
(a) sinking bond, capital redemption or bond business, marine insurance business and motor
investment; insurance business;

(b) indemnifying for loss of income as a result of “motor insurance business” means the business of
disability by accident or sickness; effecting contracts of insurance indemnifying
owners or persons financially interested in motor
(c) indemnifying for cost of hospitalization as a vehicles against damage to the vehicles, or any
result of disability by accident or sickness; payment made to extinguish the legal liability of the
owner or driver arising out of the use of the vehicle
(d) insuring the payment on the happening of or any payment made to extinguish any other liability
the contingencies of birth, marriage or failure for the use of the vehicle;
of issue either singly or in combination; but
does not include business comprising “ordinary life insurance business” means the business
insurance contracts which are terminable by of life insurance where the insurer assumes no
the insurer at intervals not exceeding twelve responsibility to collect the premium from the
months, or by notice to the insured; insured;

“policy” means a valid insurance contract whatever

“Manager” and “officer” have the meanings assigned
the form, in which the rights and obligations of the
to them under the Companies Act 2009 ;
parties to the contract are expressed or created;
“marine insurance business” means the business of “policy-holder” means the person who for the time
effecting contracts of insurance upon vessels of any being has the legal title to the policy and includes
description, including cargoes, freights and other any person to whom a policy is for the time being
interests which may be legally insured, or in relation assigned;
to such vessels, cargoes and freight, goods, wares,
merchandise and property of whatever description “prescribe” means prescribe by rules, regulations or
insured for any transit by land, water or air, or by orders;
combination thereof and whether or not including
warehouse risks or similar risks in addition to or “registered” means registered for the purpose of this
incidental to such transit, and includes any other Act.
risk customarily included among the risks insured
against in marine insurance policies;
8 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 9

PART II—ESTABLISHMENT OF SIERRA LEONE INSURANCE (c) establish standards for the conduct of
COMMISSION insurance intermediaries;

Establishment 2. (1) There shall continue to be in existence a body to be (d) monitor rates of insurance premiums and
of Sierra commissions in respect of all classes of
Leone known as the Sierra Leone Insurance Commission.
Insurance
insurance;
Commission (2) The Commission shall be a body corporate having
perpetual succession and capable of acquiring, holding and disposing (e) protect insurance policy-holders, insurance
of any property, whether movable or immovable, and of suing and beneficiaries and third parties to any
insurance contract;
being sued in its corporate name, and subject to this Act, performing
all such acts as bodies corporate may by law perform. (f) approve standards and conditions to be
applicable to the insurance industry;
(3) The Commission shall have a common seal the use of
which shall be authenticated by the signatures of the Chairman and (g) provide a bureau to which complaints may
other member of the Commission generally or specifically authorised be submitted by the members of the public;
by the Commission for that purpose.
(h) ensure adequate insurance protection and
(4) The Commission shall have power for the discharge security for national strategic assets and
of its functions under this Act to acquire and hold any movable or properties;
immovable property, to dispose of such property and to enter into
(i) formulate proposals for the promotion of
any contract or other transaction.
sound and efficient insurance market in the
country;
Object and 3. (1) The object of the Commission is to ensure effective
functions of (j) ensure in respect of re-insurance that the local
Commission
administration, supervision, regulation and monitoring of the business retention capacity is exhausted before an
of insurance in Sierra Leone. insurer resorts to re-insurance outside Sierra
Leone;
(2) For the attainment of its object the Commission shall
perform the following functions:— (k) undertake sustained and methodical public
education on the insurance business in
(a) ensure strict compliance with the provisions general; and
of this Act and statutory instruments made
under it and any other enactment relating to (l) generally perform such other functions as are
insurance; necessary or incidental to the functions
specified in this section.
(b) register insurers, re-insurers and insurance
4. (1) The Commission shall consist of - Composition
intermediaries who transact insurance of
business in Sierra Leone; Commission.
(a) a Chairman;
10 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 11

(b) the Financial Secretary or his representative; (3) The Chairman shall preside at meetings of the
Commission and in his absence the other members shall appoint a
(c) the Commissioner of Insurance; member to preside.
(d) two representatives of the Sierra Leone
(4) The quorum for any meeting of the Commission shall
Insurance Association;
be five.
(e) a representative of the Sierra Leone Chamber (5) Decisions at meetings of the Commission shall be
of Commerce and Agriculture; determined by a majority of the votes of the members present and
voting and in the event of an equality of votes, the Chairman or
(f) a representative of the Sierra Leone Bar person presiding shall have a second or casting vote.
Association; and
(6) The validity of any proceedings of the Commission
(g) two other persons, one of whom shall be a shall not be affected by any vacancy among its members or defect in
woman. the appointment of any member.
(2) The Chairman and the person referred to in paragraph
(7) Except as otherwise provided, the Commission shall
(g) of subsection (1) shall be appointed by the President subject to
regulate its proceedings.
the approval of Parliament.
6. (1) A member of the Commission who has any interest in Disclosure of
(3) The members of the Commission, except the ex-officio interest.
a contract proposed to be made with the Commission shall disclose
members, shall hold office for a term of three years and thereafter
the nature of his interest to the Commission and shall not participate
shall be eligible for re-appointment for another term of three years
in any deliberations of the Commission in respect of that contract.
only.
(2) A member of the Commission who infringes subsection
(4) A member of the Commission, other than an ex-officio
(1) shall be liable to be removed from the Commission.
member, may resign his office by writing addressed to the Minister.
7. (1)The Commission may for the discharge of its functions Committees
(5) The members of the Commission other than the of the
appoint such committees as may be necessary which shall consist of Commission.
Commissioner of Insurance shall be paid such allowances as the
members of the Commission or non-members or both and may assign
Minister may determine.
to them such functions as the Commission shall determine.
Meetings of
the 5. (1) The Commission shall ordinarily meet for the dispatch
Commission. (2) A member of the Commission shall be appointed
of its business at such times and places as the Chairman may
chairman of such committee.
determine and in any event the Commission shall meet at least once
a month.
(3) The members of a committee shall be paid such
allowances as the Commission may determine;
(2) A special meeting of the Commission shall be held
upon a written request of at least three members of the Commission
addressed to the Secretary to the Commission.
12 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 13

Commissioner, 8. (1) There shall be a Commissioner of insurance who shall (b) grants from Government or any other
Deputy
Commissioner.
be appointed by the President subject to the approval of Parliament sources;
and who shall be the chief executive of the Commission.
(c) monies accruing to the Commission by way
(2) The Deputy Chief Executive of the Commission shall of revenue;
be the Deputy Commissioner of Insurance (hereafter referred to as
“the Deputy Commissioner”), and shall be appointed by the President (d) loans granted to the Commission by
subject to the approval of Parliament. Government, a bank or any other financial
institution; and
(3) The Commissioner and Deputy Commissioner shall
be persons possessing recognised professional qualifications and (e) donations.
proven experience in insurance matters.
11. (1) The Commission may obtain loans and other credit Borrowing
powers.
(4) The Commissioner shall, subject to such general facilities on the guarantee of the Government from such banks and
directions as the Commission may give on matters of policy, be other financial institutions as the Minister may approve.
responsible for the day- to-day administration of the Commission.
(2) Without prejudice to subsection (1), the Commission
(5) The Deputy Commissioner shall assist the may with the approval of the Minister borrow money from any other
Commissioner in the performance of his duties and shall perform source.
such other duties as the Commission may after consultation with the
Commissioner direct. 12. (1) The Commission shall keep proper books of account Accounts
and proper records in relation to the accounts. and audit.
Secretary and 9. (1)There shall be an officer to be designated as the Secretary
other staff of to the Commission who shall be appointed by the Commission on (2) The books and accounts of the Commission shalI at
Commission.
such terms and conditions as it may determine. the end of each financial year be audited by the Auditor-General or
by an auditor appointed by him.
(2) The Secretary to the Commission shall perform such
functions as the Commission or the Commissioner may direct. (3) The Commission shall pay in respect of the audit such
fees if any, as the Auditor-General and the Commission may agree on.
(3) The Commission may engage such other officers and
employees as may be necessary for the effective discharge of its (4) The Auditor-General shall submit a report of the audit
functions and on such terms and conditions as it may determine. carried out by him or by an auditor approved by him to the Commission.

Funds of 10. The funds of the Commission shall include- (5) The Commission shall, not later than three months
Commission. after receiving the report of the Auditor-General pursuant to
(a) fees and other charges payable by insurers subsection (4) forward the report to the Minister who shall submit
and intermediaries; the report with his observations on it, to the Cabinet.
14 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 15

Annual 13. The Commission shall not later than six months after the (a) a certified copy of the memorandum and
Report.
end of each financial year, submit to the Minister an annual report on articles of association or if the applicant is
the activities of the Commission during that financial year and he not domiciled in Sierra Leone, the instrument
shall lay the report before Parliament. of constitution of the applicant;

Financial year 14. The financial year of the Commission shall be from 1st (b) the name, address and occupation of the
of January to the 31st day of December of the same year . directors and where the applicant is not
Commission.
domiciled in Sierra Leone, the full address of
Transfer of 15. All assets, rights and liabilities of the Commission existing the principal office in Sierra Leone and the
assets and immediately before the commencement of this Act shall be transferred names and addresses of one or more persons
liabilities.
to the Commission. resident in Sierra Leone authorised to accept
any notice required to be served on the
insurer;
PART III—REGISTRATION OF INSURERS AND OTHER
RELATED PROVISIONS
(c) a statement of the class or classes of
insurance business to be done;
All insurers to 16. (1) Subject to subsection (2), no person shall carry on
be registered. insurance business in Sierra Leone unless he applies for and is
(d) a statement duly certified by an auditor that
registered as an insurer under this Act.
section 28 has been complied with;
(2) An insurer carrying on insurance business before or (e) a statement that the amount required to be
at the commencement of this Act shall, not later than nine months deposited under section 29 has been
after the commencement of this Act apply for registration. deposited together with a certificate from the
Bank of Sierra Leone showing the amount
(3) Any person or insurer who contravenes this section deposited;
commits an offence and shall be liable on summary conviction to a
fine not exceeding 20,000,000 leones or to imprisonment for a term (f) a certified copy of the published prospectus,
not exceeding two years or to both such fine and imprisonment. if any, and of the standard policy forms of
the insurer and statements of the assured
Failure to 17. Failure of an insurer who was carrying on any class of rates, advantages, terms and conditions to
register not insurance business in Sierra Leone at or before the commencement be offered in connection with insurance
to invalidate
contract. of this Act to obtain a certificate of registration in accordance with policies:
the requirements of this Act shall not operate to invalidate any
contract of insurance entered into by him before the commencement Provided that in the case of general
of this Act or three months after that. insurance business, the Commission
may exempt any insurer from the
Application 18. (1) An application to be registered as an insurer for any requirements regarding prospectus,
fo r
registration.
class of insurance business shall be made to the Commission in forms and statements to such extent and
the prescribed form and shall be accompanied by– for such period as it may think fit;
16 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 17

(g) the receipt showing payment in the (ii) a holder of a recognised University
prescribed manner of the prescribed fee which degree in insurance or actuarial science
shall not be more than 1% of the gross with a minimum of five years post
premium for each class of insurance qualification experience in the middle
business; management cadre of an insurance
company,to head each department of the
(h) such other documents or information as may applicant’s insurance business;
be prescribed.
Registration 19. (1) The Commissioner shall not register an applicant as (g) the directors and shareholders of the
of insurers. an insurer unless he is satisfied that– applicant are not persons who have been
convicted of any offence involving fraud or
(a) the applicant conduct its insurance business dishonesty;
in accordance with sound insurance
(h) the name of the applicant is not likely to be
principles;
mistaken for the name of another insurer or
so nearly resembling that as to be calculated
(b) the applicant is duly established under the
to mislead;
applicable law and has fulfilled the
requirements pertaining to capital pursuant (i) the applicant has paid the registration fee;
to section 28; and
(c) the applicant has paid to the Bank of Sierra (j) where the class of insurance business is other
Leone the statutory deposit required under than life insurance, the application is for the
section 29 and has submitted evidence of purpose of transacting any of the four classes
such payment from the Bank of Sierra Leone; of insurance business.
(d) the arrangements relating to re-insurance in (2) The Commissioner shall register an applicant as an
respect of the classes of insurance business insurer by issuing a certificate of registration to that person.
to be transacted are adequate and valid;
20. (1) No person shall carry on the business of Protection
(e) the proposal forms, terms and conditions of and indemnity
club to be
policies are in order and acceptable; (a) protection and indemnity club; registered.

(f) there is at least– (b) mutual marine protection;

(i) one person with an Associate Chartered (c) cooperative insurance association in
Insurance Institute (ACII) Diploma or a Sierra Leone,
West African Insurance Institute (WAII) unless that person applies for and is registered as a club in the
Diploma or a recognised equivalent protection and indemnity business or any marine business under
professional insurance qualification; this Act
18 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 19

(2) For the purposes of this Act “protection and indemnity (d) motor insurance business;
club” means a mutual insurance association that provides cover for
its members. (e) miscellaneous insurance business;

Compulsory 21. (1) Tenantable or public properties shall be insured (f) re-insurance; and
tenantable
or public against fire.
(g) oil and gas insurance business.
properties
insurance.
(2) For the purposes of this Act, “tenantable properties” 25. No person other than– Prohibition of
means colleges, hospitals, entertainment centers, office buildings, (a) a company incorporated under the transaction of
insurance
dwelling houses, factories and shops. Companies Act, not being a company to business by
which section 19 of that Act applies; certain
persons.
Employer’s 22. An employer who employs more than five person shall
liablilty
insurance.
take out employer’s liability insurance in respect of the employees. (b) a society registered under the Co-operative
Societies Act, 1977
Building 23. (1) All buildings above two storeys under construction
insurance.
shall be insured against public liability. (e) a body corporate incorporated under the laws
of any country other than Sierra Leone not
being a private company or a subsidiary of a
(2) For the purposes of this section public liability means
private company,
shall be registered for any class of insurance business.
(a) injury and death to members of the public;
26. (1) Subject to subsection (2), no person shall be Capital
(b) damage to neigbouring properties as a result Requirements.
registered as an insurer unless he has and maintains a paid-up share
of excavation and falling objects .
capital of not less than–
(3) This section shall not apply to employees of the
contractor. (a) four hundred and eighty million leones if it
wishes to transact life insurance business;
Classes of 24. For the purposes of this Act insurance business shall
insurance (b) four hundred and eighty million leones for
business..
comprise-
each class of insurance business other than
(a) life insurance business and long term
insurance business; life insurance which it wishes to transact;

(b) fire insurance business; (c) ten times the amounts specified in paragraph
(a) or (b) if it wishes to transact re-insurance
(c) marine and aviation insurance business;
business.
20 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 21

(2) The capital requirements of an insurer transacting (7) The Bank of Sierra Leone shall, if so requested by the
insurance business before or at the commencement of this Act shall insurer–
be satisfied not later than two years after the commencement of this
(a) sell any securities deposited by the insurer
Act.
with the Bank under this section and hold
the cash realised by such sale as deposit; or
Deposits. 27. (1) Every company incorporated in Sierra Leone shall
before and after registration as an insurer deposit and keep deposited (b) invest in approved securities specified by the
with the Bank of Sierra Leone an amount of three hundred million insurer the whole or part of a deposit held by
Leones for each class of insurance business it seeks to transact. it in cash or the whole or part of cash received
by it on the sale of or the maturing of
(2) Every company incorporated outside Sierra Leone securities in which investment is so made as
shall before and after registration as an insurer deposit and keep deposit and may charge the normal
deposited with the Bank of Sierra Leone an amount of six hundred commission on such sale or investment.
million Leones for each class of insurance business it seeks to
transact. (8) If the cash realised by the sale of securities falls short
(3) Every company seeking to transact re-insurance of the face value of the securities, the insurer shall make good the
business shall before and after registration deposit and keep deposited deficiency by a further deposit either in cash or in approved securities
with the Bank of Sierra Leone ten times the amount specified in within a period of two months from the date on which the securities
subsections (1) and (2), as the case may be. were sold and unless he does so the insurer shall be deemed to have
failed to comply with the requirements of this section.
(4) The deposit may be made in cash or in approved
securities or partly in cash and partly in approved securities, so that (9) If the cash realised by the sale of securities exceed
the sum total of the cash deposited and the face value or nominal the face value of the securities the Commissioner may, if satisfied
value of the securities is not less than the amount required to be that the full amount required to be deposited under this section is in
deposited under this section. deposit, direct the Bank of Sierra Leone to return the excess.

(5) A deposit made in cash shall be held by the Bank of (10) Any interest accruing, due and collected on securities
Sierra Leone to the credit of the insurer. deposited under this section shall be paid to the insurer subject only
to deduction of the normal commission chargeable for realisation of
(6) The insurer may at any time replace any securities interest.
deposited by him under this section with the Bank of Sierra Leone (11) If any part of a deposit made under this section is
either by cash or other approved securities or partly by cash and used in the discharge of any liability of the insurer, the insurer shall
partly by approved securities provided the cash and the face value deposit such additional sums in cash or approved securities as will
of the securities are not less than the face value of the securities make up the amount so used; and the insurer shall be deemed to have
replaced. failed to comply with the requirements of this section unless the
22 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 23

deficiency is supplied within a period of two months from the date (2) Where an insurer has ceased to transact in Sierra
when the deposit or any part of it is so used for the discharge of Leone, any class of insurance business in respect of which a deposit
liabilities. has been made under section 25 and its liabilities in Sierra Leone
arising out of policies of the class of insurance business transacted
Reservation 28. (1) Any deposit made under section 27 shall be deemed have been satisfied or otherwise provided for, the Commission may,
of and on the application of the insurer, order the refund to the insurer of so
withdrawal
to be part of the assets of the insurer but shall not-
from deposit.
much of the deposit as does not relate to the class of insurance
(a) be susceptible to any assignment or charge; business the insurer continues to transact.

(b) be available for discharging any liabilities of 30. (1) The Commissioner on being satisfied that the Grant of
requirements of sections 19, 26 and 27 have been complied with may, certificate of
the insurer other than liabilities arising out of registration.
policies of insurance issued by the insurer with the approval of the Commission grant the certificate of registration
so long as any of the liabilities remain to the insurer.
undischarged;
(2) Where the Commissioner refuses to grant a certificate
(c) be liable for attachment in execution of any of registration, he shall within thirty days of receipt of an application
decree except a decree obtained under any for registration notify the applicant in writing of the reasons for his
policy issued by the insurer in respect of a refusal to grant the certificate.
debt due upon a policy which could not be
realised in any other way. (3) Where the Commissioner does not refuse to grant a
certificate of registration within three months of the date of receipt of
(2) A deposit made in respect of life insurance business the application and the applicant has complied with all the registration
shall not be available for the discharge of any liability of the insurer requirements under this Act, the certificate shall be deemed to have
other than liabilities arising out of policies of life insurance issued by been granted with effect from the expiry of three months of the date
the insurer. of the application.
(3) Where an insurer suffers a substantial loss arising
from liability to claimants and the loss is such that it cannot reasonably (4) A certificate of registration shall be valid for a period
be met from available resources, the Commission may, upon of twelve months.
application made to it by the insurer, after ascertaining the nature of
the claim, approve the withdrawal from the deposit of the insurer an (5) The Commissioner may, on the payment of the
amount of not more than ten percent of the deposit, and any amount prescribed fee issue a duplicate certificate of registration to replace a
so withdrawn shall be replaced by the insurer within ninety days certificate lost, destroyed or mutilated, or in any other case where the
after the date of the withdrawal. Commissioner thinks a duplicate certificate is necessary.

Refund of 29. (1) Where an application for registration is refused or 31. An applicant aggrieved by the refusal of the Commissioner Appeal to the
deposit.
registration is cancelled the Commissioner shall, subject to the to grant a certificate of registration may within thirty days of receipt High Court.

provisions of this Act, refund to the applicant or insurer, as the case of the notice of refusal appeal to the High Court.
may be, the statutory deposit.
24 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 25

Renewal (b) the insurer has failed to satisfy the margin of

of registration
32. (1) An insurer who has been granted a certificate of
solvency prescribed in section 35;
registration shall apply for the renewal of its certificate sixty days
before it expires. (c) the insurer has ceased to carry on in Sierra
Leone insurance business of the class
(2) An application under this section shall– assigned to it, for at least one year;
(a) be made to the Commissioner in the prescribed
(d) the insurer has applied in writing for the
form; and cancellation of his registration as an insurer;

(b) be accompanied by such documents, (e) a judgment obtained in a court in Sierra Leone
information and fee as may be prescribed. against the insurer remains unsatisfied for
thirty days and there is no appeal pending
(3) The Commissioner shall on fulfilment by an insurer of against the judgement;
the requirements of this section renew the registration and grant a
certificate of registration. (f) the insurer is carrying on simultaneously with
the insurance business any other business
(4) Where the insurer fails to apply for renewal of which is detrimental to the insurance
registration at the expiration of the period specified in subsection (1), business of the insurer;
the Commissioner may accept an application for renewal of the
registration made later, on receipt from the insurer of the prescribed (g) the business of the insurer has been
transferred to or amalgamated with the
fee and such penalty not exceeding the prescribed fee as the
business of any other insurer;
Commission may determine.
(h) the insurer has refused to submit to an
(5) Subject to subsection (4), where an insurer fails to examination of its books as provided for in
this Act;
apply for a renewal of a registration within the period provided in
subsection (1), it shall be deemed to have applied for the cancellation (i) the insurer has failed to comply with the
of its registration. provisions of section 36 (relating to accounts
of life policies);
Cancellation 33. (1) Where the Commissioner is satisfied that-
of registration (j) the insurer has failed to maintain adequate
reinsurance arrangements and treaties in
(a) a class of insurance business of the insurer respect of the classes of insurance business
is not being conducted in accordance with the insurer is authorised to transact;
sound insurance principles;
26 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 27

(k) subject to subsection (3), that the insurer (2) Where no appeal is lodged as provided for in section
lacks the necessary expertise by virtue of a 31, the Commissioner shall, with the approval of the Commission
substantial reduction in the number of its cancel the registration of the insurer and notice of such cancellation
qualified employees; shall be published in the Gazette.

(l) the insurer has contravened the provisions (3) Where the lack of necessary expertise specified in
of any law relating to reinsurance; paragraph (k) of subsection (1) relates to a particular class of insurance
business, the Commissioner may–
(m) the net assets of the insurer are below the
minimum paid-up capital and the capital has (a) suspend the insurer from carrying on that
not been made good within the time class of insurance business until the
stipulated by the Commissioner;
deficiency is corrected; or
(n) the insurer persistently fails to pay claims
promptly; (b) cancel that class of insurance business from
the number of insurance businesses the
(o) the insurer has failed to set up the special
insurer is authorised to transact
reserves prescribed under section 37;

(p) the insurer has established a branch office (4) Where the certificate of registration of an insurer is
without the approval of the Commission; cancelled; the insurer shall discontinue acceptance of any new
business and shall wind-up the insurance business–
(q) the insurer has acted in any manner without
the approval of the Commission where this (a) within two years of the date of cancellation
Act requires such approval; in the case of re-insurance business;

(r) the insurance business has been wound-up (b) Within twelve months of the date of
or otherwise dissolved or has gone into cancellation in any other case; and
liquidation;
(c) in all cases, a receiver may be appointed from
(s) the insurer, in the case of a reinsurance the date of cancellation.
company, has failed to satisfy the provisions
of section 27, (5) If the Commission is satisfied that the insurer has
complied with the requirements for non-compliance or contravention
the Commissioner shall give notice in writing to the insurer of his for which the registration was cancelled and has complied with any
intention to cancel the registration of the insurer in respect of a further directions which may be given to the insurer, the Commission
particular class or classes of insurance business and the provisions may reinstate registration.
of section 30 shall apply to such notice as if it were a notice to reject
an application for registration.
28 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 29

Alterations 34. (1) Every insurer shall furnish the Commission with full
in particulars
(3) The investments of the life insurance fund shall be
and authenticated particulars of any alteration or change in any of
to be kept separate from the investment of any other fund of the insurer.
reported. the matters specified in section 18.
(4) The life insurance fund shall–
(2) Where the alteration affects the assured rates, terms,
advantages and conditions in connection with life policies the insurer
(a) be absolutely the security of the policy-
shall furnish the Commission with full particulars of the alteration
holders and shall be held by the insurer as
before it takes effect.
though it were an insurer carrying on
business other than life insurance business;
Margin of 35. (1) The solvency margin of an insurer shall be as follows:-
solvency.
(b) not be applied for satisfying any liability
(a) in the case of an insurer carrying on life arising out of any contract of the insurer for
insurance business the liabilities of the which it would not be applicable if the
insurer shall not exceed the amount of the business of the insurer were only life
life insurance fund of the insurer; and insurance business; and

(b) in the case of any other class of insurance (c) not be applied directly or indirectly for any
business, the assets of the insurer shall purpose other than that of life insurance
exceed its liabilities by a minimum of one tenth business referred to in subsection (1).
of the premium income.
37. (1) An insurer shall establish and maintain in respect of Reserves.
(2) The Minister may, on the advice of the Commission each class of insurance business-
prescribe–
(a) the standard of solvency margin for insurers; (a) reserves for unexpired risks;

(b) the method for calculating the assets and (b) reserves for outstanding claims; and
liabilities of an insurer for the purposes of
this section. (c) contingency reserves to cover fluctuations
in securities and variations in statistical
Life insurance 36. (1) Where an insurer carries on life insurance business estimates.
fund and its
control. together with any other class of insurance business, the insurer shall
keep a separate account of all receipts in respect of the life insurance (2) An insurer shall maintain in respect of insurance
business other than life insurance business–
business.

(a) in the case of insurance business other than

(2) The receipts referred to in subsection (1) shall form a marine insurance business, the reserves for
separate life insurance fund with an appropriate name. unexpired risks amounting to not less than
forty-five percent of the total net premiums;
30 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 31

(b) in the case of marine hull insurance business 38. (1) No insurer shall declare or distribute any dividend Dividends.

the reserves for unexpired risks amounting except from profits approved by its governing body as profits on
to not less than seventy-five percent of the hand after retaining unimpaired–
net premiums;
(a) the entire paid-up capital stock;
(c) in the case of reserves for outstanding claims,
the reserves shall be equal to the total (b) the statutory margin of solvency, the
estimated amount of all outstanding claims statutory reserve fund or technical reserve
together with a further amount representing as the case may be; and
twenty percent of the estimated amount of
outstanding claims in respect of claims (c) a sum sufficient to pay all net losses reported
incurred but not reported at the end of the in the case of settlement all liabilities for
last preceding year; and expenses of management, rates and taxes,

(d) in the case of contingency reserves, reserves (2) Any dividend declared or distributed under
shall not be less than three percent of the subsection (1) shall be reported to the Commissioner within thirty
total premiums or twenty percent of the net days after such declaration or distribution.
profits whichever is the greater; and such
amount shall accumulate until it reaches the 39. (1) No insurer shall allow credit on the premium payable Restriction
on credit.
minimum paid-up capital or fifty percent of on an annual policy.
the net premiums, whichever is the greater.
(2) The receipt of an insurance premium shall be a
(3) An insurer shall maintain with respect to the life condition precedent to a valid contract of insurance and there shall
insurance business– be no cover in respect of an insurance risk, unless the premium is
paid in advance.
(a) a general reserves fund which shall be
credited with an amount equal to the net PART IV—RECORDS, ACCOUNTS AND RETURNS
liabilities on policies in force at the time of
the actuarial valuation; and 40. (1) Where the insurer carries on business in more than Separation of
accounts.
one of the classes specified in section 24, he shall keep a separate
(b) contingency reserves which shall be credited account of all receipts and payments in respect of each class of
with an amount equal to one percent of the insurance business.
premiums.
32 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 33

(2) Where the insurer carries on the business of life (d) an analysis of life insurance policies at the
insurance, all receipts of such business shall be carried to and shall beginning and end of that year;
form a separate fund to be called life insurance fund; and the assets
of this fund shall be kept free from all incumbrances and shall be (e) a return required to be filed under section 51;
separate from all other assets of the insurer.
(f) a statement showing the amount of premium,
(3) Where the insurer carries on long term insurance commission and claims arising out of
business along with life insurance business, he shall keep separate business ceded or accepted by way of re-
accounts of all receipts and payments in respect of each sub-class of insurance;
long term insurance business.
(g) a return required to be filed under section 60;
Accounts to 41. (1) Every insurer shall, within three months of the end of
be furnished.
each year prepare with reference to that year and furnish to the (2) The accounts and other returns required under
Commissioner in respect of all insurance businesses transacted in subsection (1) shall be audited by an independent firm of auditors
Sierra Leone- approved by the Commissioner.

(a) a balance sheet showing the financial 42. A registered foreign insurer shall keep in Sierra Leone- Records to be
kept by
position in respect of all insurance foreign
businesses transacted (a) a record of all domestic policies issued by insurers.

him showing his rights and obligations under

(b) a profit and loss account in respect of all the policies;
insurance business;
(b) a record of premiums received on all domestic
(c) a separate revenue account for– policies;

(i) life insurance business; (c) a record of all his income and disbursements
in respect of his insurance business made in
(ii) each class of insurance business other Sierra Leone; and
than life insurance business;
(d) a record of all investments under this Act
(iii) each class of re-insurance business; made and documentary evidence of his
assets and liabilities in Sierra Leone.
34 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 35

Accounts and 43. (1) Every registered foreign insurer shall furnish to the (2) Every domestic insurer shall forward to the
statements
submitted by
Commissioner, a copy of every statement, balance sheet, revenue Commissioner the minutes of every general meeting within thirty
foreign account and valuation statements which he is required to submit to days of the holding of the meeting.
insurers in the insurance authority of the country in which the insurer is
their country
of domicile.
domiciled; and in case the insurer is not required to file any documents 47. In addition to the certificate required from an auditor under Certificate
to the insurance authority of the country in which he is domiciled, he the Companies Act, the returns under section 41 shall carry such relating to
account
shall furnish a statement showing his total assets and liabilities at the additional certificates to be signed by such persons as may be statement.
close of the period covered by the document and his total income prescribed.
and expenditure.
48. If the auditor has made any report to the directors of a Auditor to
send copy of
(2) If any document in subsection (1) is in any language domestic insurer in connection with the financial affairs of the insurer report made
other than English, the document shall be accompanied by a certified or the management of a registered foreign insurer in connection with to Manage-
translation in English. the financial affairs in Sierra Leone of the foreign insurer, a copy of ment to
Commissioner.
the report shall be forwarded to the Commissioner.
Certificate 44. (1) Every registered foreign insurer shall, within six
that foreign
insurer has
months of the close of the year forward to the Commissioner a 49. (1) If in the opinion of the Commissioner a document Amendments
and
complied certificate from the authority administering insurance legislation in furnished by an insurer under section 41 is incorrect or not prepared
correction in
with the his country of domicile that the insurer has complied with the in accordance with this Act, he may, by notice in writing, call upon accounts
requirements
and law in
requirements of the law, and that no action was taken against the the insurer to amend the document or to furnish a correct document returns
country of insurer by the authority in the year for which the account returns are or as the case may be, a document prepared in accordance with this
domicile. furnished nor any action is contemplated by the authority against Act
the insurer for any default or contravention of the law.
(2) If an insurer fails to comply with a notice referred to in
(2) If a certificate is in any language other than English, a subsection (1) to the satisfaction of the Commissioner, the
certified translation in English shall accompany the original. Commissioner may himself either amend the document in question,
giving the insurer particulars of the amendments, or reject the
Consolidated 45. If an insurer is a holding company of other insurers or a document.
accounts of subsidiary of another insurer, the insurer shall submit in addition to
insurers who
are holding the statement in section 41 a consolidated balance sheet and a (3) A document amended by the Commissioner or by an
companies or consolidated income and expenditure account of the group of insurer under this section shall be deemed to have been submitted to
subsidiaries. companies of which the insurer is the holding company or subsidiary the Commissioner in its amended form.
as the case may be.
(4) Where a document of an insurer has been rejected by
Reports made 46. (1) A copy of every report made by the directors of a the Commissioner under subsection (2), the insurer shall be deemed
to share- registered insurer to the share-holders or policy-holders shall be to have contravened the provisions of this Act in relation to that
holders or
policy-holders forwarded to the Commissioner immediately after it is submitted to document unless and until he has furnished another document in
and abstract the share-holders or policy holders as the case may be. accordance with the directions of the Commissioner.
of meetings.
36 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 37

Actuarial 50. (1) Every insurer transacting life insurance business and 53. (1) The returns under section 41 shall be signed in the Authentication
reports and of accounts
abstracts. long term insurance business shall once in every three years cause case of a domestic insurer by the Chairman, one Director, the principal and abstracts.
an investigation to be made by an actuary into the financial conditions officer of the insurer and in the case of a foreign insurer by the
of the life and long term insurance businesses carried on by him Chairman, one Director , the principal officer of the insurer or the
including a valuation of his liabilities in respect of the businesses principal representatives of the insurer in Sierra Leone and the auditor.
and shall cause an abstract of the report of such actuary to be made (2) The returns under section 50 shall be signed by an
in accordance with the prescribed form. actuary and by all the persons mentioned in subsection (1) excluding
the auditor.
(2) The abstract of the report of the actuary shall be
(3) The returns shall be furnished to the Commissioner
furnished to the Commissioner within twelve months of the end of four copies of which at least two shall be authenticated in the manner
the period to which such abstract relates. set out in subsection (1) or (2).

Minimum 54. (1) Every document filed for the purpose of registration, Inspection of
51. The basis and the method of calculation of liabilities in documents
basis of amendment or correction and every return furnished to the
valuation of respect of life insurance businesses and long term insurance business and supply of
Commissioner under sections 41 and 50 or a certified copy thereof, copies.
liabilities. may be prescribed and in that case no insurer shall cause the actual shall be kept by the Commissioner and shall be opened to inspection;
liability of any policy in respect of life insurance business and long and any person may procure a copy of the document or return or any
insurance business to be less than the liability worked out on the part of it on payment of the prescribed fee.
basis and method.
(2) A printed or certified copy of the statement of accounts
and abstract furnished in accordance with the provisions of sections
Revaluation 52. (1) If it appears to the Commissioner that an investigation 41 and 50 shall, on the application of any shareholder or policy-
of liabilities.
or valuation to which section 50 applies does not properly indicate holder made any time within one year from the date on which the
the condition of the affairs of the insurer by reason of the faulty document was so furnished, or required to be furnished, be supplied
basis adopted in the valuation, he may after giving notice to the to him by the insurer.
insurer giving him an opportunity of being heard, cause an
investigation or valuation to be made by an actuary appointed by the 55. (1) Every return furnished to the Commissioner which Evidence of
has been certified by the Commissioner to be a return so furnished documents.
insurer at his expense, on such date as the Commissioner may specify;
shall be deemed to be a return so furnished.
and the insurer shall place at the disposal of the actuary all the
materials required by the actuary for the purpose of the investigation (2) Every document purporting to be certified by the
or value commissioner to be a copy of a return shall be received in evidence
as if it were the original return unless some variation between it and
(2) The abstract and statement prepared as a result of the the original return is proved.
investigation shall be furnished by such date as the Commissioner
may specify. 56. (1) No person shall carry out the activities of an actuary Qualification
unless that person is registered and accredited by a reputable of actuaries.
institution
38 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 39

(2) A person who contravenes this section commits an (5) An insurer who has been allowed to realise assets
offence and shall be liable on summary conviction to a fine not under subsection (4) shall be deemed to comply with the provisions
exceeding Le20,000,000.00 or to imprisonment for a term not exceeding of this section if the assets fall short of the amount required to be
two years or to both such fine and imprisonment. invested under this section by such sum as does not exceed the
amount of assets allowed to be realised under subsection (4).
PART V—INVESTMENTS BY INSURANCE COMPANIES
Investments. 58. (1) Every insurer registered under this Act carrying on Statement of
57. (1) Every insurer shall at all times in respect of the investments
life insurance business shall every year along with his account
insurance business transacted by it in Sierra Leone invest and hold of assets and
returns, submit to the Commissioner a return on the prescribed form liabilities
invested in Sierra Leone assets equivalent to not less than the amount
showing as at the 31st day of December of the previous year the relating to life
of the funds in such insurance business as shown in the balance insurance
assets held invested in accordance with section 57 and all other
sheet. business.
particulars to establish that the requirements of that section have
(2) Subject to any other provision of this Act, the been complied with.
investment of insurance funds referred to in subsection (1) shall
comprise the following- (2) The Commissioner may require any insurer to whom
subsection (1) applies to submit on the 1st day of May, 1st day of
(a) in respect of life insurance fund– August and 1st day of November a return showing the assets held
invested on 31st day of March, 30th day of June and 30th day of
(i) 50% in Government securities; and September of each year.
(ii) 50% in such other investments as the
insurer may determine. 59. The Commissioner may at any time, take such steps as he Verification
of assets
considers necessary for the inspection or verification of the assets
(b) in respect of insurance business other than invested in pursuance of section 57 or for the purpose of securing
life insurance business– the particulars necessary to establish that the requirements of that
section have been complied with; and the insurer shall comply with
(i) 25% in Government securities; and
the requisition made by the Commissioner and if he fails to do so
(ii) 75% in such other investment as the within two weeks from the receipt of the requisition he shall be deemed
insurer may determine. to have defaulted in complying with the requirements of section 57.

(3) The Minister may, after consulting the Commission 60. (1) No insurer shall grant loans or temporary advances Prohibition of
loans to
by order vary the percentage of insurance funds to be invested. either on hypothecation of property or on personal security or Directors
otherwise any director, managing director, general manager or principal
(4) If any insurer at any time is unable to meet his debts officer of the insurer by whatever name called or to any other company
without realising some or all of his assets required to be invested or firm in which such director, managing director, general manager or
under this section, an application may be made in the prescribed form principal officer holds the position of director, manager, secretary,
and in the prescribed manner to the Commissioner, who, after making officer or partner, except loans on life policies issued by it within their
such further investigation as may be necessary allow the insurer to surrender value.
realise such part of the assets invested under this section as he
thinks fit.
40 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 41

(2) Nothing in this section shall apply to loans made by (4) When an investigation is made under this section,
an insurer to a banking company. the Commissioner may, after giving an opportunity to the insurer to
make a representation in writing or be heard in person, in writing–
(3) Where any event occurs giving rise to circumstances
the existence of which at the time of the grant of any subsisting loan (a) require the insurer to take such action in
would have made such grant a contravention of this section, such respect of any matter arising out of the
loan shall, notwithstanding any contract to the contrary, be repaid investigation as he thinks fit to secure
within three months from the occurrence of such event; and in case compliance with this Act; or
of a default, the director, managing director, general manager or
principal officer by whatever name called shall, without prejudice to (b) cancel the registration of the insurer under
any other penalty which he may incur, cease to hold office with the paragraph (a) of subsection (1) of section 33;
insurer granting the loan on the expiry of the three months.
(c) apply to the Court for the winding up of the
(4) Nothing in this section shall prohibit a company from insurance business whether the registration
granting such loans or advances to a subsidiary company or to any has been cancelled or not;
other company of which the company granting the loans or advance
is a subsidiary company. (d) make a recommendation to the Minister–

PART VI—INVESTIGATION OF INSURERS (i) for the removal or suspension of any

director, manager, officer or employee
Commissioner 61. (1) The Commissioner may, at any time, investigate the who, in the opinion of the Commissioner,
to investigate affairs of an insurer and may for this purpose employ an auditor or should be removed or suspended or for
affairs
any other person as he thinks fit. the appointment of any person who has
had proper training and experience to
(2) It shall be the duty of every manager, managing advice the insurer in rectifying matters
director, officer or employee of the insurer to produce to the and whose remuneration shall be paid
Commissioner or the person appointed by him to conduct the by the insurer; or
investigation, all such books of account, registers and other
documents in his custody or power and to furnish him with any (ii) without prejudice to subparagraph (i),
statement or information relating to the affairs of the insurer within for taking any other step as an
such time as the Commissioner or the person appointed by him to alternative or in addition to the action
conduct the investigation may require. taken under sub-paragraph (i).

(3) The Commissioner or the person appointed by him to (5) The Minister may, after considering the
conduct the investigation may examine any director, the managing recommendation under paragraph (d) of subsection (4) and giving an
director, manager, officer, employee or agent of the insurer on oath on opportunity to the insurer to make a representation in writing or be
any matter pertaining to the affairs of the insurer. heard in person make such order as he thinks fit.
42 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 43

(6) All expenses of and incidental to any investigation (3) No application shall be made to the Commissioner
made under this section shall be defrayed by the insurer, and shall under subsection (1) unless–
have priority as debts due from the insurer, which shall be recoverable
as arrears of the State. (a) a notice of the intention to apply had been
published in the Gazette by the applicant;
Inspection of 62. All books, records, registers and documents of every and
books, domestic insurer in respect of all insurance businesses, and in the
documents
etc. case of every registered foreign insurer in respect of the insurance (b) a statement of the nature of the proposed
business transacted by him in Sierra Leone, shall at all reasonable transfer together with an abstract containing
times be open to inspection by the Commissioner or any other person the material facts related to such transfer and
appointed by him for that purpose. such other matters as may be prescribed, have
been sent to each policy-holder and the
Power to call 63. (1) The Commissioner may by notice in writing require proposed transfer at the time as the
fo r publication referred to in paragraph (a).
information any insurer to supply him with any information relating to his insurance
business and the insurer shall comply with such requirement within (4) A policy-holder of a transferor may, instead of
such period as may be specified in the notice. becoming a policy-holder of the transferee, in writing elect to–

(2) Any information supplied under this section shall be (a) surrender his policy and accept the surrender
certified by the principal officer or the principal representative as the value of the policy, whereupon the amount
case may be, of the insurer and if the notice so requires, also by an the surrender value shall be paid to him; or
auditor or an actuary or both.
(b) accept a paid-up policy whereupon the actual
value shall be deposited in trust with the Bank
PART VII—AMALGAMATION, TRANSFERS, AND
of Sierra Leone or with any person authorised
WINDING-UP in that behalf by the Bank of Sierra Leone to
be made available to the policy-holder on
Transfer of 64. (1) Notwithstanding any provision to the contrary in this fulfilment of the contract.
life insurance
policies Act, where an insurer transacting life insurance business exclusively
or with any other insurance business intends to transfer his entire 65. Where an amalgamation takes place between any two or Sta tement
more insurers or where the business of an insurer is transferred , the after amalga-
insurance business or his life insurance business to another insurer, mation or
he shall apply to the Commissioner for approval of the transfer. insurer carrying on the amalgamated business or the person to whom transfer.
business is transferred as the case may be, shall, within three months
(2) The Commissioner may, after hearing the applicant, from the date of the completion of the amalgamation or transfer, furnish
the insurer to whom the business is to be transferred, the policy- to the Commissioner–
holders of the applicant and any other interested person as the
(a) a certified copy of the scheme, agreement or
Commissioner may think fit, approve the transfer subject to such
deed under which the amalgamation or
conditions as he may specify. transfer has been effected;
44 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 45

(b) certified copies of any other reports on which (4) For the purposes of this section the market value of any
the scheme, amalgamation or transfer was investment shall be the realisable value as can most easily and
founded; and satisfactorily be ascertained and if there is a difference in opinion
between the Commissioner and an insurer relating to the value of any
(c) balance sheets and revenue accounts in investment the matter shall be referred to the Commission whose
respect of the insurance business of each of decision shall be conveyed to the Commissioner and the insurer
the insurers concerned in the amalgamation within two months of the date of the reference.
or transfer prepared in the forms prescribed
under section 41 or as near to them as 67. The Commissioner may apply to the Court for the winding- Winding-up
possible. up of any insurance business on the following grounds–

Margin of 66. (1) If at any time the market value or book value of the (a) that a period of more than six months has
solvency investments made out of the funds of an insurer carrying on life elapsed since the cancellation of the insurer’s
insurance and long term insurance business is not more than nine- registration;
tenths of the actuarial liability of the business, in addition to any
claims outstanding at the end of the calendar year in respect of the (b) that it appears from the returns furnished
business, the Commissioner may give notice to the insurer to increase under this Act or from the results of any
the investments of the life fund by a transfer to the life fund out of the investigation made under it that the company
capital or any other resources of the insurer, within a period not is insolvent;
exceeding four months from the date of the notice.
(c) that the insurer is deemed to be insolvent
(2) If, at any time, the market value of the investments at the under section 66; or
end of any year of an insurer transacting general insurance business
(excluding the investments made in respect of life insurance business (d) that the continuance of the company is
and long term insurance business, if the insurer carries on those prejudicial to the interest of policy-holders.
businesses) is less than two-fifths of the gross direct premium written
68. Notwithstanding anything contained in the Companies Act, Voluntary
by him in Sierra Leone within a period not exceeding two months winding-up
an insurance company shall not be wound up voluntarily except for
from the date of the notice.
the purpose of effecting an amalgamation or a reconstruction or on
the ground that by reason of its liability it cannot continue its
(3) If the insurer to whom a notice under subsection (1) or business.
subsection (2) has been issued fails to submit a statement showing
the increase of the investment together with a statement as to how 69. The Minister may by Statutory Instrument make rules Rules relating
the increase was effected before the expiry of the notice, the insurer determining- to winding-up.

shall be deemed to have contravened the provisions of this Act and

shall be deemed to be an insolvent insurer. (a) the extent to which the rules made under the
Companies Act shall apply to the winding
up of insurance companies;
46 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 47

(b) the manner in which the assets and liabilities PART VIII- REINSURANCE BROKERAGE
of an insurance business which is being
wound up shall be determined; 72. (1) No reinsurance broker shall undertake reinsurance Reinsurance
broking unless the reinsurance broker applies for a reinsurance brokerage
Licence.
(c) the manner in which the interest of holders brokerage licence from the Commission.
of life insurance policies and long term
(2) The Commission may issue a reinsurance broking
insurance policies shall be safeguarded
licence to a reinsurance broker if it is satisfied that–
incase the insurance business being wound
up carries on life insurance business along (a) the reinsurance broker has the required
with other classes of insurance business; expertise to conduct the class of reinsurance
business ;
(d) the manner in which the insurer, may carry
on business with reduced contracts if the (b) at least one partner or director of a
Commission is of the view that continuation reinsurance broking firm or company has at
of the business of the insurer is more least five years working experience in the
equitable to the policy-holders than winding middle level management of a reinsurance
up; company or reinsurance department of an
insurance company;
(e) the manner in which the insurance business
(3) No reinsurance broker shall carry on the business of
being wound up may be amalgamated with reinsurance brokering unless the reinsurance broker has statutory
any other insurer or his business may be deposit of not less than sixty million Leones to be deposited at the
transferred to any other insurer. Bank of Sierra Leone.

Right of 70. (1) The Commissioner shall be heard by the Court in any (4) A reinsurance broker who contravenes this section
hearing of
Commissioner
matter relating to the winding up of an insurance company. commits an offence and shall be liable on summary conviction to fine
not exceeding Le 10,000,000.00 and the reinsurance business
(2) Without prejudice to the generality of subsection (1), transacted shall be terminated.
the Court shall hear the opinion of the Commissioner if any scheme
under paragraph (d) or (e) of section 69 is contemplated. PART IX—REGISTRATION OF INSURANCE AGENTS, CHIEF
AGENTS, BROKERS, ADJUSTERS AND ASSESSORS
Control over 71. The power of the registrar referred to in the Companies Act Insurance
liquidators 73. (1) No person shall act as or carry on as insurance agent agents and
2009 shall be exercised by the Commissioner in relation to liquidators or chief agent or assessor six months after the commencement of this assessors to be
of insurance companies. licenced.
Act unless he obtains a licence in the prescribed form authorising
him to act as such or to carry on such business.
48 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 49

(2) The licences that may be issued under the provisions (8) The Commission shall prescribe the fee for the grant
of this section in respect of agents shall be the following– or renewal of a licence.

(a) insurance agent in respect of life insurance (9) The Commission on being satisfied that the applicant
business; for a licence has complied with the requirements of the law may direct
the Commissioner to grant the licence.
(b) insurance agent in respect of general
(10) The Commission may refuse the application for a
insurance business; licence for a reason to be recorded in writing.
(c) chief agent in respect of life insurance
business; (11) If any person acts as an agent, chief agent or assessor
without holding a valid licence he shall be guilty of an offence and
(d) chief agent in respect of general insurance shall, on summary conviction be liable to a fine not exceeding Ten
business. million leones or to a term of imprisonment not exceeding twelve
months or to both such fine and inprisonment.
(3) An applicant for the licence of an insurance agent in
74. (1) An insurance agent or chief agent shall work for the Holder of
respect of life insurance business and chief agent in respect of life licence for
insurance business shall be an individual. insurer or insurers specified in the licence issued under section 73 to specified
work paragraph insurers
(4) An assessor shall be an individual or a company. (2) If, for any reason, an insurance agent or chief agent
wishes to terminate his association with any insurer and work for
(5) An applicant for a licence under this section shall another he
apply to the Commission in the form prescribed for the particular may apply to the Commission to amend the licence in this behalf .
licence he desires to hold, and forward with the application such
(3) The Commission may, after satisfying itself that the
documents as may be prescribed for that licence.
holder of a licence does not owe any amount to the insurer , grant the
application.
(6) If the Commission is of the opinion that applicants for
a particular class of licence should possess educational, technical 75. (1) No person who- Disqualification
of insurance
professional qualifications it may by notification in the Gazette specify (a) is under the age of twenty-one years; agents etc.
the qualifications and the date with effect from which applicants for
new licences of that class should possess those qualifications. (b) is found by a court to be of unsound mind;

(c) is an undischarged bankrupt;

(7) The licence granted under this section shall be for a
period of one year and shall be renewed every year on an application (d) has been convicted by a court of an offence
made in the prescribed form and in the prescribed manner to the involving dishonesty, criminal misappropria-
Commission: tion or criminal breach of trust or cheating or
Provided that no application for renewal shall be entertained one forgery or an abetment of or an attempt to
year after the expiry of the licence. commit such offence; or
50 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 51

(e) has been found guilty of dishonesty or gross 77. If at any time the Commissioner is of the opinion that there Regulation of
contracts of
professional misconduct in any financial is need to regulate the contracts between insurers and any or all the agents.
institution, classes of agents specified in subsection (2) of section 73, he may,
shall be granted a licence under section 73. by notification in the Gazette, specify the conditions that will be
deemed to be included in the contracts of all or any of the classes of
(2) The Commissioner may cancel the licence of a holder, agents.
if the holder-
78. The Commissioner may, by notice in writing, require any Power to call
(a) suffers from any of the disabilities under fo r
insurance agent, special agent or chief agent to supply him with any information
subsection(1);
information relating to his insurance business and the insurance from agents.
(b) induces a prospect to insure with an insurer agent, special agent or chief agent shall comply with such requirement
not registered under this Act; within such period after the receipt of the notice as may be specified
in the notice.
(c) knowingly contravenes any provision of this
Act or any rule or order made under it; 79. (1) No person shall act in Sierra Leone as an insurance Registration
of insurance
intermediary unless he is registered as such under this Act. Intermediaries.
(d) knowingly procures by fraudulent
representations payment of or the obligation (2) Nothing in subsection (1) shall apply to a person
for payment of any premium on an insurance who has acted in Sierra Leone as an insurance intermediary on or
policy; or before the commencement of this Act if–

(a) immediately before the commencement he

(e) collects insurance premium under any policy
was acting in Sierra Leone as an insurance
when he is not authorised to do so, or having
intermediary; and
authority to collect premium retains it for a
period longer than he is entitled to. (b) within three months after the commencement
he applies for registration, and is registered
(3) The cancellation of a licence shall be without within that period.
prejudice to any penalty of which the holder of the licence may be
liable to. 80. (1) No person shall qualify for registration as an Qualifications
insurance broker or insurance adjuster unless it is a company or a of insurance
Filing 76. (1) Every insurer shall forward to the Commissioner a brokers and
ontracts with
partnership. adjusters.
copy of the contract offered to every class of licence holder specified
Commissioner.
in subsection (2) of section 73 or subsection (1) of section 79. (2) In the case of a partnership one of the partners and in
the case of a company the chief executive shall have the following
(2) If, any insurer deviates from the contract filed with professional qualification-
the Commissioner, he shall forward to the Commissioner a statement
showing the deviation between the contract offered and the specimen (a) Associate of the Chartered Institute of
filed with the Commissioner. Insurance;
52 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 53

(b) a holder of a University degree in insurance (7) An agent shall not receive premium in his own name
or its equivalent; or but in the name of his principal and shall remit such premium received
to the insurance company concerned within five working days.
(c) a holder of a West African Insurance Institute
(W.A.I.I.) Diploma plus at least ten years (8) A person who contravenes this section commits an
experience in the insurance industry. offence and shall be liable on summary conviction to a fine not
exceeding ten million Leones or to a term of imprisonment not
(3) No insurance broker or adjuster shall carry on the exceeding two years or to both such fine and imprisonment.
business of insurance brokering or insurance adjusting in Sierra Leone
unless the broker or adjuster has and maintains at all times while 81. (1). The Commissioner - Cancellation
carrying on that business a paid-up share capital of not less than of
registration.
fifty million leones to be deposited with the Bank of Sierra Leone in (a) may cancel or suspend the registration of any
Government securities, as security deposit and a professional insurance intermediary on any ground on
indemnity cover of not less than one hundred million leones. which it could have refused to grant the
application for registration; and
(4) The Minister may, on the advice of the Commission
by statutory instrument increase the minimum paid-up capital and (b) shall cancel the registration of any broker or
the professional indemnity cover requirements specified in adjuster who fails to satisfy the paid-up
subsection (1) capital and security deposit requirement
under subsection (3) of section 80.
(5) An insurance broker or adjuster shall prepare in the
prescribed form and furnish to the Commission within three months (2) Before cancelling or suspending any registration the
after the end of each financial year– Commissioner shall give notice in writing to the insurance intermediary
concerned setting out the grounds for the proposed cancellation or
(a) a report covering the prescribed particulars suspension and shall afford the insurance intermediary an opportunity
relating to all insurance transactions to be heard by the Commission.
undertaken by it during that financial year;
(3) Upon cancellation of registration, the relevant
(b) a certified true copy of its financial statement
and annual report; and certificate of registration shall be surrendered by the holder to the
Commission.
(c) any other information that the Commission
may request. 82. (1) An application for registration as an insurance Application
fo r
intermediary shall be made to the Commission by any person who registration as
(6) Where an insurance business is transacted through has the prescribed qualification. insurance
an insurance broker, the insurance broker shall not less than 30 days intermediary.
of collecting the premium pay to the insurer the amount collected by (2) Every application shall be in such form, contain such
him. particulars and shall be made in such manner as may be prescribed.
54 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 55

Records to be 83. (1) Every insurance intermediary shall keep records of all 87. If the Commissioner is of the opinion that an adequate Distribution
kept by of profits of
insurance
insurance transactions undertaken by him. proportion of the profits arising from life insurance business is not life insurance
intermediaries being distributed, allocated or allotted to the holders of life insurance business
(2) Records kept by virtue of subsection (1) shall contain policies in Sierra Leone, he may by notification in the Gazette regulate
particulars as to the names and addresses of the insured persons and the proportion of the profits that may be distributed or allocated to
the insurers under coverages procured by the insurance intermediary, the holders of life insurance policies in Sierra Leone.
the nature of the coverages, the premiums collected and such other
particulars as may be prescribed. 88. (1) No insurer shall amend or change the conditions of a Rights of
contract in respect of life insurance business during the currency of holders of life
insurance
Power of 84. For the purpose of satisfying himself as to whether or not the policy except with the consent and concurrence of the policy policies.
Commissioner provisions of this Act are being complied with, the Commissioner holder.
to investigate
insurance may at anytime- (2) A life insurance policy shall not be cancelled by the
intermediaries insurer except for non-payment of any premium due within the days
(a) authorise an investigator to conduct an
examination of the business of any insurance of grace which shall not be less than thirty days if the premium is
intermediary as may be deemed reasonable payable, at intervals of not less than three months, seven days if the
in the circumstances; and premium is payable monthly, and three days if the premium is payable
weekly:
(b) by notice in writing require any insurance Provided that nothing shall prevent the revival or restoration of a
intermediary to produce any document or cancelled policy contract on the same or modified terms if the insured
information on any matter relating to complies with such conditions for the revival of the contract as may
insurance contracts negotiated or solicited be specified in the policy.
by such intermediary.
(3) A life insurance policy shall not be cancelled by
PART X—PROVISIONS RELATING TO POLICY CONTRACTS reason of non-payment of any premium due, if the insured has paid
Jurisdiction of 85. Every policy issued in Sierra Leone to a person resident in premium continuously for such minimum number of years as may be
local courts in specified in the policy:
respect of Sierra leone shall be governed by the Laws of Sierra Leone and shall
insurance be subject to the jurisdiction of the courts of Sierra Leone
policies. Provided that this benefit shall be available only in respect of such
notwithstanding any provision to the contrary in the policy or in an
contracts under which the whole of the benefits becomes payable
agreement relating to the policy.
either on the occurrence, or at a fixed interval or fixed intervals after
the occurrence of a contingency.
Policy not 86. No insurer whether registered under section16 or not shall
invalid owing
to failure to plead non-complaince with this Act or any other law for the time (4) If the Commissioner is of the opinion that the benefits
comply with being in force in his defence in relation to any claim arising out of any available to the holder of a life insurance policy in case he ceases to
the law.
policy issued by him. pay premium, are not fair and equitable to the policy-holder, he may
after giving the insurer an opportunity of being heard, lay down the
conditions which the policy-holder shall fulfil to secure the benefits
and the formulae and basis on which the benefits available shall be
calculated.
56 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 57

Assignment 89. (1) A transfer or assignment of a policy of life insurance (6) Subject to the terms and conditions of the transfer or
of life
insurance
whether with or without consideration may be made by endorsement assignment the insurer shall, from the date of the receipt of the notice
policies. upon the policy itself or by a separate instrument signed in either referred to in subsection (3), recognise the transferee or assignee
case by the transferor or assignor or his duly authorized agent and named in the notice as the only person entitled to benefit under the
attested by at least one witness specifically setting forth the fact of policy and such person shall be subject to all liabilities and equities
the transfer or assignment. to which the transferor or assignor was subject at the date of the
transfer or assignment may institute any proceeding in relation to the
(2) The transfer or assignment shall be complete and policy without obtaining the consent of the transferor or assignor or
effectual upon the execution of such endorsement or instrument duly making him a party to such proceedings.
attested.
(7) Any rights and remedies of an assignee or transferree of a
(3) Where the assignment or transfer is in favour of the policy of life insurance under an assignment or transfer effected prior
insurer it shall not be operative against him and shall not confer upon to the commencement of this Act shall not be affected by the
the transferor or assignor or his legal representative any right to sue provisions of this section.
for the amount of such policy or the money secured thereby until a
(8) Notwithstandng any law or custom having the force of
notice in writing of the transfer or assignment and either the said
law to the contrary , an assignment in favour of a person made with
endorsement or instrument itself or a copy certified to be correct by
the condition that it shall be inoperative or that interest shall pass to
both transferor and transferee or their duly authorised agents have
some other person on the happening of a specifed event during the
been delivered to the insurer at his principal place of business in
Sierra Leone. life time of the person whose life is insured and an assignment in
favour of the survivor or survivors of a number of persons shall be
(4) The date on which the notice referred to in subsection valid.
(3) is delivered to the insurer shall regulate the priority of all claims
under a transfer or assignment as between persons interested in the 90. Any person who, in any return, report, certificate, balance Penalty for
false
policy and where there is more than one instrument or transfer or sheet or other document required by or for the purposes of any of the statements.
assignment the priority of the claims under such instrument shall be provisions of this Act knowingly makes a statement which is false in
governed by the order in which the notice referred to in subsection any material particular, commits an offence and shall be liable on
(3) is delivered. summary conviction to a fine not exceeding ten million leones or to
imprisonment for a term not exceeding three years or both
(5) Upon the receipt of the notice referred to in
subsection(3), the insurer shall record the fact of such transfer or General
91. (1) Any person who contravenes any provision of this
assignment together with the date and the name of the transferee or provisions
the assignee and shall, at the request of the person who gave the Act for which no penalty has been specified , commits an offence relating to
notice or the transferee or assignee on payment of the prescribed fee and shall be liable on summary conviction to a fine not exceeding ten penalties and
offences.
grant a written acknowledgement of the receipt of such notice which million leones or to a term of imprisonment not exceeding two years
shall be conclusive evidence against the insurer that he has duly or to both.
received the notice to which such acknowledgment relates.
58 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 59

(2) Where an offence is committed by a body of persons- (2) Any person aggrieved by an action or order of the
Commission or Commissioner other than an order to which subsection
(a) in the case of a body corporate every director, (1) applies may appeal to the Minister against the order within thirty
manager, secretary or other similar officer days of the date of the order giving the grounds of referring the case
shall also be deemed to be guilty of the for review, and the Minister after giving an opportunity to the
offence; and Commissioner to contest the grounds of appeal may decide whether
to allow or dismiss the appeal.
(b) in the case of a partnership every partner or
officer of that body shall also be deemed to
PART XI—MISCELLANEOUS
be guilty of the offence
95. The Commissioner shall cause the registration of or Publication of
registration
provided that no person shall be deemed to be guilty of an offence cancellation of registration of aninsurance business to be published and cancella-
under this subsection if he proves that the act in respect of which he in the Gazette. tion of
is charged was committed by some other person without his consent registration in
or connivance and that he exercised all due diligence to prevent the the Gazette.
commission of that act as he ought to have exercised having regards 96. Every insurer shall be subject to the provisions of this Act Insurers to be
to the circumstances. subject to the
in relation to any class of insurance business so long as its liabilities Act while
Prosecution 92. All offences under this Act shall be prosecuted before the in Sierra Leone in respect of business of that class remain unsatisfied liabilities
of offences.
High Court. or not otherwise provided for. remain
unsatisfied
Power of 93. If in any proceedings, civil or criminal, it appears to the 97. The Minister may on an application being made to him in Exemption
court to from Act to
grant relief.
Court hearing the case that a person is or may be liable in respect of this behalf in the prescribed form exempt any insurer from all or any certain
negligence, default, breach of duty or breach of trust, but that he has of the provisions of this Act in relation to any class of his business insurers
acted honestly and reasonably and that having regard to all the where such insurer has ceased to enter into any new contract of the ceasing to
circumstances of the case he ought fairly to be excused for the transact
class of business. business.
negligence ,default, breach of duty or breach of trust, the Court may
relieve him either wholly or partly from his liability on such terms as 98. (1) An insurance business shall not be registered by a Similarity of
it may think fit names of
name identical to that by which any insurance business in existence
insurers.
Action of 94. (1) Any person aggrieved by any of the following actions is already registered or so nearly resembling that name as to be likely
Commission
or orders of the Commission or Commissioner as the case may be that to deceive, except where the insurance business in existence is in the
etc to be
is- course of being dissolved and signifies its consent to the
reviewed. Commission.
(a) an order refusing to register an insurance
business;
(2) If any insurance business, through inadvertence or
(b) an order cancelling the registration of an otherwise, is without such consent registered by a name identical
with that by which an insurance business already in existence whether
insurance business;
previously registered or not is carrying on business or so nearly
(c) an order cancelling a licence under this Act resembling it as to be likely to deceive, the first mentioned insurance
business shall if called upon to do so by the Commission on the
may appeal to the court within thirty days of the order.
application of the second mentioned insurance business, change its
name within a time to be fixed by the Commission.
60 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 61

Service of 99. (1) A direct insurance broker or reinsurance broker who (b) the reserves for unexpired risks amounting
notice.
places a business of insurance with a foreign insurance company to not less than seventy five percent of the
shall- net premium in the case of marine hull
(a) serve the Commission notice of the contract insurance business
before placement of risk; (c) the reserves equal to the total estimated
amount of all outstanding claims together
(b) include any commission received on the with a further amount representing twenty
transaction five percent of the estimated amount of
(2) An insurer who places a business of insurance with outstanding claims in respect of claims
foreign insurance company on fronting basis shall incurred but not reported at the end of the
(a) serve the Commission notice of the contract last preceding year in the case of reserves
before placement of risk; for outstanding claims;
(b) include any commission received on the (d) reserves less than three percent of the total
transaction as part of the gross commission premiums or twenty percent of the net profits
received by the insurer during the relevant whichever is the greater and such amount
year. shall accumulate until it reaches the minimum
paid up share capital or fifty percent of the
(3) A person who contravenes this section commits an net premiums whichever is the greater, in the
offence and shall be liable on summary conviction to a fine of Le case of contingency reserves.
30,000,000.00
(3) A reinsurer shall maintain with respect to the life insurance
Reserves of 100. (1) A reinsurer shall establish and maintain in respect of
reinsurers. business-
each class of insurance business- (a) a general reserve fund which shall be credited
with an amount equal to the net liabilities on
(a) reserves for unexpired risk; policies in force at the time of the actuarial
(b) reserves for outstanding claims; and valuation; and
(c) contingency reserves to cover fluctuations (b) contingency reserves which shall be credited
in securities and variations in statistical with an amount equal to the one percent of
estimates. the premiums.
(2) A reinsurer shall maintain in respect of insurance 101. (1) Any notice issued under any provision of this Act or Service of
process upon
business other than life insurance business- any process in legal proceedings may be served upon a person insurer
carrying on insurance business by leaving it at the principal office of
(a) the reserves for unexpired risks amounting the insurer.
to not less than forty five percent of the total (2) If the principal office of a person carrying on insurance
net premiums in the case of insurance business cannot reasonably be found, any notice or process in any
business other than marine insurance legal proceedings may be served by leaving it at the office of the
business; Commissioner.
62 No. 12 Insurance Act 2016 No. 12 Insurance Act 2016 63

(3) Service of process upon the Commissioner in (2) An enactment , contract or instrument shall be
accordance with subsection (2) shall be deemed to be service upon construed with such modifications, amendments or omissions as
the insurer. would be necessary to bring it into conformity with subsection (1).

Restriction 102. (1) After the expiry of three months from the (3) Notwithstanding subsection (1), where any insurer
on the use of commencement of this Act, no person other than an insurer registered or insurance broker satisfies the Commissioner that he does not
the word underwrite such insurance, the Commissioner may in writing permit
insurance. under this Act or the holder of a licence under sections 73 and 79
shall have or use the word insurance or assurance or any derivative such insurer or broker to effect the insurance outside Sierra Leone.
in the name under which such person is carrying on business.
108. (1) Every medical practitioner, dental surgeon, pharmacist Compulsory
indemnity
(2) No holder of a licence under sections 73 and 79 shall nurse or laboratory technician practising in Sierra Leone shall within insurance for
use any words as part of his business name which indicate that he is such time after the coming into operation of this Act as the Minister certain
an insurer. after consultation with the Minister responsible for health shall professionals.
determine, insure the practice.
Summary of 103. The Minister shall, every year, cause to be published in
returns to be such manner as he may direct a summary of the accounts, balance (2) Subsection (1) does not apply to medical practioners,
published. dental surgeons, pharmacist, nurses and laboratory technicians
statements, abstracts and other returns under this Act or purporting
to be under this Act which have been furnished in pursuance of the practising in public institutions.
provisions of this Act, to the Commissioner during the year preceding
the year of publication and may append to such summary any note of (3) Any person who contravenes subsection (1) commits
the Commissioner and any correspondence. an offence and shall be liable on summary conviction to a fine not
exceeding Le 10,000,000.00 or to a term of imprisonment not exceeding
Advertisement. 104. No advertisement shall be issued by an insurer or by an two years or to both the fine and imprisonment.
agent licensed under section 73 which directly or by implication has
the tendency to mislead or deceive prospective policy-holders with 109. The Commission may delegate any of its functions to the Commission
Commissioner where it considers necessary. to delegate
respect to the assets, corporate -structure, financial standing, age or functions.
relative position in the insurance business or any other material respect
of insurer or the agent as the case may be, or of any competitor of the 110. The Minister may after consultation with the Commission Regulations.
insurer or agent. by statutory instrument make regulations, rules or orders prescribing
any thing to be prescribed or generally for the purpose of giving
Exceptions. 105. Nothing in this Act shall apply to any Trade Union registered effect to this Act.
under the Trade Unions Act and such Friendly Societies registered
111. (1) The Insurance Act 2000 is hereby repealed. Repeal.
under the Friendly Societies Act, as may be exempted from all or any
of the provisions of this Act, by an order in writing by the
Commissioner on an application made to him on his behalf. (2) Notwithstanding the repeal or revocation of the
Insurance Act 2000 any orders, rules or regulations made under that
Properties 106. All properties and liabilities within Sierra Leone shall be repealed Act and in force at the commencement of this Act shall
and liabilities continue in force unless revoked.
liabilities to
insured with an insurer registered under this Act.
be insured in Transitional
Sierra 112. A licence issued under the repealed Act and which is in
force before the commencement of this Act shall continue to have Provision.
Leone.
Insurance of 107. (1) Subject to subsection (3) an insurance in respect of effect from the commencement of this Act as if granted under this
imports to be goods to be imported into Sierra Leone shall, after the commencement Act.
effectted in
Sierra Leone.
of this Act, be made with an insurer registered under this Act.