QUESTION ONE

The National Health Insurance Fund (NHIF) Act of Kenya provides for the establishment,
administration, and management of a national health insurance fund. The National Health
insurance fund(amendment)Act No 1 of 2022 amended the principal act to expand the scope of
coverage and improve access to healthcare for all Kenyans.
The following is an evaluation of the legal framework of healthcare insurance under the National
Health Insurance Act as amended and how it meets the objectives of universal healthcare in
Kenya.

Beginning with section 15(1A), the NHIF Act provides for the compulsory contribution of both
employers and employees towards the Fund. The contributions made by members are used to
finance the provision of healthcare services to the members and their dependents. The amended
Act provides for the expansion of the scope of coverage to include all Kenyan citizens and
permanent residents, including those in the informal sector. This expansion of coverage is a step
towards achieving universal healthcare in Kenya as it ensures that everyone has access to quality
healthcare.
Under section 15(1B), the amended Act has introduced a new provision that requires the national
government to contribute to the Fund on behalf of indigent and vulnerable persons. This
provision ensures that even the most vulnerable members of society have access to healthcare.
The NHIF Act provides for the financing of the Fund through contributions made by both
employers and employees. The contributions are calculated based on a percentage of the
member’s salary.
The NHIF Act provides for a comprehensive benefits package that covers both inpatient and
outpatient care, maternity services, and surgical procedures. The benefits package is designed to
provide a wide range of services to members and their dependents. The amended Act has
expanded the benefits package to include specialized medical services such as cancer treatment,
renal dialysis, and organ transplants. This expansion of the benefits package ensures that
members have access to a more comprehensive range of medical services.
The NHIF Act provides for the establishment of a Board of Trustees that is responsible for the
governance and management of the Fund. The Board is responsible for setting policies,
approving budgets, and overseeing the management of the Fund. The amended Act has
introduced new provisions that strengthen the governance and management of the Fund,
including the appointment of an auditor to audit the Fund’s financial statements.
In conclusion, the legal framework of healthcare insurance under the National Health Insurance
Act as amended has made significant strides towards achieving universal healthcare in Kenya.
The Act has expanded the scope of coverage, improved the benefits package, and introduced new
financing mechanisms. However, there is still more work to be done to ensure that all Kenyans
have access to quality healthcare. The government needs to allocate more resources towards
healthcare and work towards addressing the underlying socio-economic factors that contribute to
poor health outcomes.

QUESTION TWO
No-fault insurance is a system of insurance that compensates accident victims without requiring
them to prove fault or negligence on the part of any party. This is in contrast to the traditional
fault-based system of insurance, which requires the victim to prove that the other party was at
fault for the accident. In Kenya, the motor insurance industry operates on a fault-based system,
where the driver who is at fault for the accident is held responsible for compensating the other
party.
The main objective of a no-fault insurance system is to provide prompt and efficient
compensation to accident victims, regardless of who is at fault. This is achieved by eliminating
the need to prove fault, which reduces the time and costs associated with legal proceedings. The
system also aims to reduce the impact of asymmetries of information resulting in adverse
selection and moral hazard. This is because in a fault-based system, individuals may be
incentivized to misrepresent their level of risk, which can lead to adverse selection and moral
hazard.
The design elements of a no-fault insurance system may vary depending on the jurisdiction.
However, some common design elements include:
1.Thresholds-No-fault systems often have a threshold for the severity of injuries that must be met
before a victim can claim compensation.
2.PIP Benefits-In no-fault systems, Personal Injury Protection (PIP) benefits are paid directly to
the victim by their own insurer, regardless of fault. PIP benefits typically cover medical
expenses, lost income, and other expenses related to the accident.
3.Limitations on Lawsuits-No-fault systems often limit the ability of accident victims to sue for
non-economic damages such as pain and suffering.
One of the major benefits of a no-fault insurance system is that it provides prompt and efficient
compensation to accident victims, without the need for lengthy and costly legal proceedings.
This can help to reduce the burden on the courts and other legal institutions. Additionally, no-
fault systems can help to reduce fraud and abuse in the insurance industry by eliminating the
need to prove fault.
In contrast, the common law fault-based system of insurance applicable in Kenya requires the
victim to prove that the other party was at fault for the accident, which can be time-consuming
and expensive. This can lead to delays in compensation and may discourage some victims from
pursuing their claims. Moreover, the fault-based system may incentivize individuals to
misrepresent their level of risk, leading to adverse selection and moral hazard.
In conclusion, a no-fault insurance system can provide several benefits over a fault-based
system, including prompt and efficient compensation, reduced costs and delays, and reduced
fraud and abuse. While the specific design elements of a no-fault system may vary, the overall
objective of providing fair and efficient compensation to accident victims remains the same.
QUESTION THREE
The Financial Market Conduct Bill, 2018 sought to introduce significant reforms on the conduct
of business of financial conglomerates and financial consumer protection in Kenya. Some of the
key reforms include:

1.Establishment of a Financial Services Authority (FSA)

The Bill proposed the establishment of an independent regulatory body, the FSA, to oversee the
regulation and supervision of financial institutions in Kenya. The FSA would be responsible for
ensuring the safety and soundness of the financial system, protecting consumers, and promoting
competition.
2.Enhanced supervision of financial conglomerates.
The Bill sought to strengthen the regulatory framework for financial conglomerates by
introducing consolidated supervision. This approach would enable the FSA to regulate the entire
financial conglomerate as a single entity and assess its overall risk profile, as opposed to
regulating each individual subsidiary separately.
3.Conduct of business standards.
The Bill introduced a new set of conduct of business standards to govern the operations of
financial conglomerates. These standards include requirements for fair treatment of customers,
disclosure of information, and transparency in pricing.
4.Financial consumer protection.
The Bill placed significant emphasis on financial consumer protection by introducing new
provisions aimed at protecting consumers from unfair and deceptive practices. These provisions
include measures to enhance transparency, improve dispute resolution mechanisms, and establish
a consumer protection fund.
Overall, the Financial Market Conduct Bill, 2018 sought to address the gaps in the existing
regulatory framework for financial conglomerates and enhance consumer protection in Kenya’s
financial sector. However, as stated earlier, the Bill has not been enacted Into law, and its impact
on the financial sector remains uncertain.