The Uganda Insurance Regulatory Authority has issued a directive to all life insurance companies requiring changes to endowment assurance products with both risk and savings components, following a market-wide review of product wordings and customer fairness. Insurers must incorporate the Authority’s findings into their product features and documentation and resubmit products for re-approval. Key requirements include making the Key Features Statement (KFS) fully compliant with Regulation 51(2)(b), clearly setting a minimum 30-day cooling-off cancellation period, and applying a minimum 30-day grace period supported by two lapse warnings and a lapse notice before lapse. The directive also requires at least a 12-month reinstatement period with full disclosure of reinstatement conditions and any interest charges, reducing the surrender period to a maximum of two years, and providing clear surrender value scales or tables rather than hard-to-understand formulas, including explicit disclosure that surrender value is not a full premium refund. For non-forfeiture features, the Authority requires disclosure of automatic premium loan (APL) interest and limits APL duration via automatic conversion to paid-up cover before value falls below 50% of surrender value, with paid-up options embedded in conventional endowment products. Additional measures cover transparency on policy loan pricing, limits on unilateral changes after tax or legal changes with a right to surrender if adverse, clearer presentation and acknowledgement of exclusions, use of plain English in contract wording, submission of onboarding scripts for approval, and recordkeeping for delivery of policy documents and KFS. Firms must submit for re-approval at least two flagship products within three months of the circular, and all remaining products within the subsequent three months. Failure to comply may result in a fine of up to 1,000 currency points under Section 120(2) of the Insurance Act.
Uganda Insurance Regulatory Authority 2025-12-08
Uganda Insurance Regulatory Authority directs life insurers to revise endowment assurance products with new surrender, paid-up and disclosure requirements
The Uganda Insurance Regulatory Authority has mandated life insurers to revise endowment assurance products to enhance customer fairness, following a market review. Key changes include compliance with Regulation 51(2)(b), a minimum 30-day cooling-off period, and a 12-month reinstatement period with full disclosure. Insurers must resubmit products for re-approval, with non-compliance potentially resulting in fines.