December 18, 2018
Are You Treating Your Customers Fairly?

‘Treating customers fairly (“TCF”) is a principle which aims to raise standards in the way firms carry on their business by introducing changes that are aimed at conferring benefits on consumers by increasing their confidence in the financial services industry.

Specifically, TCF aims to help customers fully understand the features, benefits, risks and costs of the financial products they buy and minimize the sale of unsuitable products by encouraging best practice before, during and after a sale.

In Kenya TCF, is founded on various legislations including: the Constitution, the Insurance Act, the Consumer Protection Act and the Competition Act.

Pursuant Section 3A (1) of the Insurance Act, the Insurance Regulatory Authority (“IRA”) developed mandatory TCF guidelines which took effect on 1st January, 2017. These guidelines are aimed at promoting a fair, safe and stable insurance sector, protecting the interest of the insurance policyholders and beneficiaries and promoting the development of the insurance sector.

Firms are expected to demonstrate that they deliver the following 6 TCF outcomes to their customers throughout the product life cycle, from product design and promotion advice and servicing, to complaints and claims handling and throughout the product value chain:

Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect.

Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.


How Can Firms Assess and Implement TCF?

Firms can determine their compliance with TCF guidelines by identifying potential gaps in their TCF practice and developing procedures to plug into areas such as:

  • Staff training/awareness of TCF
  • Sales and marketing materials
  • Product understanding
  • Advice and sales process
  • Fact finding and flow of information to the client (including after-sales)
  • Complaint handling
  • Remuneration/incentives
  • Risk assessment of TCF non-compliance
  • Record keeping and Management Information


Why is implementation of TCF important?

The IRA is keen on ensuring the implementation of services that match the promises that insurers give to their customers. The Authority will enforce the TCF framework through regulatory sanctions with “naming and shaming” for regulated entities in breach, prosecution of individual wrongdoers among others.

Way forward?

Firms will need to review their existing business procedures, practices and contracts and implement appropriate measures and reporting tools so as to ensure compliance with TCF.


For more details on how to ensure compliance with the TCF guidelines, please contact our Partner Kananu at

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