Following the amendment of the financial institutions Act, the Insurance Regulatory Authority (IRA) has issued a bancassurance licence to Diamond Trust Bank.
The licence means that DTB can now freely offer insurance policies to its customers and the public.
Bancassurance takes effect in Uganda following the passing of the Financial Institutions Amendment Bill 2016 into law which provides for Bancassurance.
According to Financial Institutions Act 2016, IRA is responsible for receiving applications from financial institutions for licensing to conduct Bancassurance business, subject however to prior written authorisation from the Central Bank.
DTB has partnered with Jubilee Insurance to launch Bancassurance. The Bank received the certificate on 28th December 2017.
Handing over the license at ceremony held at the IRAU Headquarters in Nakasero on Thursday, Alhaj Ibrahim Kaddunabbi Lubega, the Chief Executive Officer at IRA said that Bancassurance will help increase insurance penetration in Uganda.
“This partnership will surely serve the public. There are two benefits; serving the people and earning from the service,” Kaddunabbi said. He however noted that all banks venturing into insurance services must adhere to the “set rules”.
On his part, Varghese Thambi, the Managing Director at Diamond Trust Bank Uganda reiterated Kaddunabbi’s remarks, noting that the development will speed up insurance penetration from 0the current 0.8%.
“It is 99% an opportunity for us since the insurance penetration is still very low. There is less number of outlets in the insurance sector and we have opened up windows through our 38 branches across the country,” Thambi said.
He added that the bank will carry out free training on the importance of insurance to its customers from their respective branches.
IRA says that about 6 banks including Barclays, Stanbic, NC Bank and Bank of Africa among others have already received certificates to sell insurance products.