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Ghana’s New Insurance Law Aims to Increase Insurance Penetration and Allow for New Innovative Insurers

Published: 2021 | Source: A2ii

The new Insurance Act 2021 (Act 1061) has been enacted in Ghana. 

It replaces the previous Insurance Act of 2006, Act 724 to bring the regulation of the insurance industry into conformity with international framework and supervisory standards and to increase its competitiveness on the international market. 


‘The [National Insurance] Commission shall… have regard to the need to ensure that the regulation and supervision of insurance products and insurance services that support financial inclusion are proportionate to the nature, scale, complexity and diversity of the insurance business.’ – Insurance Act, 2021, p. 13

The new Act, which is part of the initiatives of the National Insurance Commission (NIC) to grow the insurance industry, aims at strengthening corporate governance, deepening the insurance penetration and increasing access to insurance for the population.

Particularly mentioned are farmers, those in the informal sector, and those with low incomes. The informal sector in Ghana is substantial. Recent data revealed that 90% of the employed population works informally, and even more in rural areas. Insurance penetration is low, currently reported as 1% of premium income to GDP.

The Act mandates the following types of insurance: 

  • Public liability insurance for certain places (including offices, shops, factories), insuring against negligence and destruction of life and property
  • Profession indemnity insurance, required for a list of specific occupations (including accountants, bankers, lawyers, doctors, engineers, laboratory scientists, insurance brokers, and teachers) 

‘The new Act will help to fill the gaps in the previous Act, enable both the industry and the NIC to comply with international standards and best practices, and promote innovation and inclusivity’, said Michael Kofi Andoh, Deputy Commissioner of Insurance at the National Insurance Commission.

The new Act will help to fill the gaps in the previous Act, enable both the industry and the NIC to comply with international standards and best practices, and promote innovation and inclusivity.

Michael Kofi Andoh, Deputy Commissioner of Insurance, National Insurance Commission

New Innovative Insurance Licenses

The Act has also added a new category of licence known as the  innovative insurance licence for innovative insurers or reinsurers, as well as intermediaries. These new licences will be granted for a period not exceeding two years but may be extended. The intention is to develop a regulatory sandbox system to help encourage and promote innovation. 

The criteria for granting an innovative licence are that ‘the applicant is capable of using a new or different technological or innovative measure to carry on the proposed innovative insurance business or to provide products or services’, that customers will be sufficiently protected, and that the issuance of the licence does not ‘materially impact the ability of the Commission to supervise the licensee’. The Minister may choose to enact, by legislative instrument, additional regulations regarding applications, qualifications, and regulation of holders of licences.

The NIC is expected to issue further directives and guidelines to direct the implementation of the law. This is the latest development in the Ghanaian insurance market, after being one of the pioneering countries to introduce mobile insurance regulations in 2017.

Inclusive insurance developments in the region

Elsewhere in the Sub-Saharan African region, we have seen some interesting inclusive insurance developments – Lesotho is at an advanced stage of developing microinsurance regulations, and South Africa, Mozambique, and Zimbabwe also regulate microinsurance. Mozambique also has a pilot project for Index-based Insurance. To learn more about the latest in inclusive insurance regulations in Sub-Saharan Africa and worldwide, see our Inclusive Insurance Regulations Map  and subscribe to our mailing list.

Below is the new Ghana Insurance Act.