With the transition period over, Malawi’s central bank is enforcing mandatory insurance requirements for construction projects, public buildings and imports, while introducing tougher penalties for fraud.

By Edwin Mauluka

The Reserve Bank of Malawi (RBM), through the Registrar of Financial Institutions, has urged the public and all stakeholders to comply with key provisions of the Insurance Act, 2024 (Act No. 6 of 2025), particularly those relating to advance premium payments and mandatory insurance requirements.

The call follows the expiry of a 12-month transitional period provided under the Act, which came into effect on 1 May 2025. The legislation repealed and replaced the Insurance Act of 2010, with full compliance now required as of 1 May 2026.

In a statement issued on Friday, RBM Director of Financial Sector Regulation Kisu Simwaka said the central bank would begin enforcing provisions aimed at strengthening consumer protection, improving regulatory compliance, and safeguarding life, property and economic activity.

Simwaka said Section 53 of the Act requires insurance premiums to be paid in advance before a policy takes effect. The provision, however, does not apply to life insurance products other than group life insurance.

“This means that insurance companies will not provide insurance cover to any person or business unless the premium has been paid. Policyholders are therefore strongly advised to pay premiums promptly to ensure that their insurance cover remains valid and enforceable,” he said.

On mandatory insurance requirements, Simwaka highlighted provisions covering construction projects, public buildings, imported goods and insurance fraud.

Under Section 90 of the Act, all registered contractors must obtain insurance policies before commencing work. The cover must protect against third-party bodily injury, loss of life or property damage arising from construction activities.

“The obligation to maintain such insurance policies shall remain in force throughout the project period and shall only expire upon expiry of the project defects liability period,” Simwaka said.

He added that Section 91 requires owners of public buildings to insure their properties against risks such as structural collapse, fire and natural disasters. The insurance must also cover liability arising from death, bodily injury, loss of property or property damage.

“This requirement applies to all buildings accessible to the public, including tenement houses, lodges and hostels,” he said.

Simwaka further noted that Section 107(1) requires any insurance covering goods imported into Malawi to be placed with a licensed insurer operating in the country.

“The Registrar urges the public and all stakeholders to take note of these requirements and ensure timely compliance with the provisions, which are critical to promoting a stable, transparent and resilient insurance sector in Malawi,” he said.

He also warned that the Act introduces tougher penalties for insurance fraud. Under Section 95, offenders face fines of up to MWK100 million, or three times the amount defrauded or intended to be defrauded, whichever is greater. Convicted offenders may also face up to 10 years in prison.

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