Effects of Weak Legislation on the Performance of Nonlife Insurance Companies in Kenya

The paper asses how weak legislation in the insurance sector affects the performance of nonlife insurance companies in Kenya. The Insurance Regulatory Authority is a State Corporation established under the Insurance Act (Amendment) 2006, CAP 487 Laws of Kenya whose roles are to regulate, supervise and develop the insurance industry in Kenya with overall aim of ensuring financial stability of insurance firms. The study adopted descriptive research design covering a stratified sample of 108 respondents drawn from 27 Nonlife insurance companies in Kenya. Data was collected by use of questionnaires and was later analyzed using descriptive and inferential statistical analysis tools. According to the study findings there was a negative correlation between weak legislation in the insurance sector and insurance sector performance with correlation coefficient of -0.264 at 0.01 level of significance. The study recommended that insurance regulator needs to reduce the menace of under pricing by effectively administering the existing insurance legislation.