Short Term Insurance
Regulatory Framework
The Non Bank Financial Institutions Regulatory Authority Act and the Insurance Industry Act and the International Insurance Act regulate the establishment, licensing and operation of short-term insurers in Botswana. The Income Tax Act; regulates the taxation of retirement fund contributions, investment income and benefits.
What is short term Insurance?
A short term insurance policy provides cover against loss, damage, liabilities and more. You pay a premium (either monthly or annually) to an insurance company who in return provides the cover to compensate you when you suffer a loss on insured items. The insurance company determines your premium based on your risk profile (age, gender, where you live, security measures, item insured, value of the item, claims history of the insured etc.) High risk = high premium and low risk = reduced premium.
Short term insurance policies consist of the following:
- Household Contents
- House owner’s Insurance
- All Risks Insurance
- Vehicle Section
- Watercraft
- Personal Liability
- Personal Accident
- And many more
- The policy wording should be analyzed in conjunction with the policy schedule to determine cover, excesses, extensions, conditions and exclusions.
What are the provided services/Processes?
- Licensing
- Complaints handling
- Analysis
- Vetting
Regulated entities
Supervision and regulation of non-bank financial institutions (s 49)
- 49. Prudentially regulated non-bank financial institutions.
- (1) The non-bank financial institutions referred to in subsection (2) are declared to be prudentially regulated non-bank financial institutions, and accordingly the provisions of section 50 and prudential rules made there under shall have effect in relation to such prudentially regulated financial institutions.
- (m) insurance agent
- (n) insurance broker
- (o) international insurance firm
- (f) an insurer
