The Uganda Insurance Regulatory Authority issued a directive after identifying cases where insurers did not refund premiums when customers request loan top-ups and the original credit facility, together with its insurance cover, is restructured or terminated. The directive requires insurers to refund the unutilised portion of the premium to the policyholder or credit it against the new insurance premium where the original policy is superseded, terminated, or rendered redundant before expiry, unless the policy explicitly provides otherwise and those terms were clearly disclosed to the client. Insurers must fully disclose premium refund terms and conditions at the point of sale and inform policyholders of their rights to refunds in cases of early termination, restructuring, or replacement of loan facilities. Refunds linked to loan restructures must be processed and paid within 30 days of the change in loan status unless otherwise agreed in writing with the policyholder, and insurers are required to maintain detailed records of these transactions. The directive takes effect immediately, and non-compliance may trigger regulatory action including administrative penalties under the Insurance Act.
Uganda Insurance Regulatory Authority 2025-11-05
Uganda Insurance Regulatory Authority directs insurers to refund unused premiums on restructured loan policies within 30 days
The Uganda Insurance Regulatory Authority issued a directive mandating insurers to refund unutilised premiums when loan facilities and their insurance covers are restructured or terminated. Insurers must disclose refund terms at the point of sale and process refunds within 30 days of loan status changes, unless otherwise agreed. Non-compliance may result in regulatory action under the Insurance Act.