Key Regulatory Bodies
The Central Bank of Kenya
The Central Bank of Kenya was established in 1966 through an Act of Parliament – the Central Bank of Kenya Act of 1966. The establishment of the Bank was a direct result of the desire among the three East African states to have independent monetary and financial policies.
The Central Bank of Kenya Act of 1966 set out objectives and functions and gave the Central Bank limited autonomy. Since the amendment of the Central Bank of Kenya Act in April 1997, the Central Bank operations have been restructured to conform with ongoing economic reforms. There is now greater monetary autonomy.
The Mandate of the Central Bank
Section 4 of the Central Bank of Kenya Act states the core mandate of the Bank as follows:
The Capital Market
The Capital Market is part of the Financial Market that provides funds for long term development. This is a market that brings together lenders(Investors) of capital and Borrowers(companies that sell securities to the public) of capital.
In November 1988, the Government set up Capital Markets Development Advisory Council and charged it with the role of working out the necessary modalities including the drafting of a bill to establish the Capital Markets Authority (the Authority).In November1989, the bill was passed in parliament and subsequently received Presidential assent (The Capital Markets Authority was set up in 1989 through an Act Parliament (Cap 485A,Laws of Kenya). The Authority was eventually constituted in January 1990 and inaugurated on 7th March 1990. The Authority is a body corporate with perpetual succession and a common seal.
The Mandate of the CMA
The Capital Markets Authority is established by an Act of Parliament to promote, regulate and facilitate the development of an orderly, fair and efficient Capital Markets in Kenya.
The principle objectives of the Authority are:
The Insurance Regulatory Authority
The Insurance Regulatory Authority is a statutory government agency established under the Insurance Act (Amendment) 2006, CAP 407 of the Laws of Kenya to regulate, supervise and develop the insurance industry. It is governed by a Board of Directors which is vested with the fiduciary responsibility overseeing operations of the Authority and ensuring that they are consistent with provisions of the Insurance Act.
The Authority is a precursor to the then Office of the Commissioner of Insurance that came into existence with the enactment of the Insurance Act, CAP 487 in 1986. Prior to this, insurance regulation was based on the UK legislation under the Companies Act 1960.
Fundamental insurance regulatory objectives:
Ensure compliance by insurance/reinsurance companies and intermediaries with legal requirements and sound business practices;