President Assents to 4 Universal Health Coverage Bills, Restructuring NHIF

In honor of the pledge to accelerate Kenya’s attainment of Universal Health Coverage (#UniversalHealthCoverage), President William Samoei Ruto signed four crucial bills promoting healthcare on October 19, 2023. These are:

1. The Primary HealthCare Bill, 2023
2. The Digital Health Bill, 2023
3. The Facility Improvement Financing Bill, 2023
4. The Social Health Insurance Bill, 2023

Transformative Changes

These four bills usher in a paradigm shift in Kenya’s healthcare legal and institutional framework by repealing the current NHIF and establishing three new funds:

• Primary Healthcare Fund (PHF)
• Social Health Insurance Fund (SHIF)
• Emergency, Chronic, and Critical Illness Fund (ECCIF)

The NHIF has recorded a steady decline in fulfilling its mandate recently. The Kenya Association of Private Hospitals (KAPH) had even banned the use of the NHIF card due to non-payment by the insurer. This situation has caused anguish for many Kenyans, as NHIF is the most popular health insurance in the country and is heavily relied upon. Patients have had to pay in cash or remain untreated. Public hospitals still accept the NHIF card for payment, but the insurer covers only limited services, prompting patients to seek assistance from private hospitals.

The President’s move to assent to the four Universal Health Coverage Bills, which repeal the current NHIF, has elicited mixed reactions as discussed in our newsletter.

Important Highlights

Section 26 of the Social Health Insurance Act, 2023 makes it mandatory for every Kenyan citizen to register as a member of the Social Health Insurance Fund. The Emergency, Chronic, and Critical Illness Fund will cover emergency and chronic illness costs once the Social Health Insurance Fund is depleted.

The Primary Healthcare Act, 2023

Section 2 of the Primary Healthcare Act defines Universal Health Coverage as ensuring “all individuals and communities receive the health services they need, including the full spectrum of essential, quality health services from health promotion to prevention, treatment, rehabilitation, and palliative care without suffering financial hardship.”

The Act further defines Primary HealthCare as “essential health care based on practical, scientifically sound, and socially acceptable methods and technology, made universally accessible to individuals and families in the community at every stage of their development, through their full participation and at an affordable cost to the community and country, in the spirit of self-reliance and self-determination.”

Its main objective is to promote and fulfill Article 43(1) of the Constitution of Kenya, 2010, which provides for every person’s right to the highest attainable standards of health care. Other objectives under Section 3 include:

• Implementing primary health care through a systemic approach and clear delineation of roles of all stakeholders towards the realization of universal health coverage
• Establishing Primary Health Care Networks, Community Health Units, and other stakeholder-centered engagement forums for sustainable primary healthcare services
• Providing for the role of the multidisciplinary team in the provision of primary health care services
• Providing for the role of community health officers, community health assistants, and community health promoters in providing community-based primary health care services

Digital Health Act, 2023

The Digital Health Act streamlines the adoption of technology to facilitate data sharing and resource utilization.

Section 3 outlines its objectives to ensure and promote Universal Health Coverage, including:

• Establishing the Digital Health Agency
• Maintaining a comprehensive integrated health information system
• Promoting innovation and the safe, efficient, and effective use of technology for healthcare, including continuity of care, emergency and disaster preparedness, and disease surveillance
• Establishing a regulatory framework for the e-Health ecosystem data life cycle
• Ensuring privacy, confidentiality, and security of health data
• Developing standards for the provision of m-Health, telemedicine, and e-learning
• Establishing a regulatory framework for e-Waste Management
• Ensuring the safe and secure transfer of personal, identifiable health data and client medical records to and from health facilities outside Kenya

Social Health Insurance Act, 2023

The Social Health Act does away with the NHIF by introducing three new funds: Primary Healthcare Fund, Social Health Insurance Fund, and Emergency, Chronic, and Critical Illness Fund.

Section 26 makes it mandatory for every Kenyan citizen to register as a member of the Social Health Insurance Fund. The Primary Healthcare Fund will enable Kenyans to purchase health services from level one to three hospitals, while the Social Health Insurance Fund will cover services from level four to six hospitals. The Emergency, Chronic, and Critical Illness Fund will cover emergency and chronic illness costs once the Social Health Insurance Fund is depleted.

The main objective, as outlined under Section 3, is to establish a framework for improved health outcomes and financial protection in accordance with the right to the highest standards of healthcare and Universal Health Coverage.

Facilities Improvement Financing Act, 2023

Section 4 provides that the Act applies to level one to level five public health facilities.

Objectives under Section 3 include:

• Enabling the collection, retention, and management of revenue derived from health services offered at public health facilities in Kenya
• Establishing a governance framework for effective planning, coordination, mobilization, and access to public facilities’ improvement financing
• Appropriating, managing, and using budgeted health services revenue to supplement operations and facilitate quality service delivery in public health facilities
• Promoting equitable public health facilities improvement financing, including benefit sharing
• Providing a unified system for financial management in public health facilities, improving efficiency and effectiveness, and promoting quality health service delivery

Response and Reactions from Kenyans

The President’s assent to the new legislation has not been well received by some Kenyans, primarily due to concerns about the high cost to salaried workers. The Standard newspaper highlighted this concern on October 23, 2023. However, Health Cabinet Secretary Susan Nakhumicha assured citizens on October 25, 2023, that a regulatory body will determine the premiums and oversee the implementation of the Universal Health Coverage Act. The transition from NHIF to the Social Health Authority will take 12 months.

Conclusion

We hope this information is helpful in understanding the current developments regarding the repeal of the National Health Insurance Fund and the establishment of the Primary Healthcare Fund, Social Health Insurance Fund, and Emergency, Chronic, and Critical Illness Fund. Please note that this newsletter provides a general guide and should not be relied upon without legal advice.

For further information or legal assistance, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

• William Karoki, Founding Partner
• Florence Mwende, Lawyer

The Supreme Court Rules That an Allotment Letter is Not a Title Deed and Cannot Be Transferred

On 22nd September 2023, the Supreme Court delivered a verdict in SC Petition No.5 (E006) of 2022, known as the “Torino case.” The Court ruled that an Allotment Letter is not a title deed and cannot confer any interest in land. It is merely an offer awaiting the fulfilment of specified conditions, including the payment of a Stand Premium and Ground Rent within prescribed timelines. Even after these conditions are met, an allottee cannot pass valid title to a third party until they acquire title through proper registration under applicable laws.

This ruling underscores that an Allotment Letter is not a title deed and cannot be transferred from one person to another. Property buyers must conduct thorough due diligence (#BuyerBeAware) to ensure they obtain a valid title deed. The principle of indefeasibility of title does not apply if the initial land allocation was illegal or procedurally flawed.

The judgment has significant implications, particularly for many Kenyans in the Coastal region, Kajiado, Juja, Nairobi (Embakasi and Starehe), and other areas, who hold #AllotmentLetters and attempt to transfer them as #TitleDeeds. Many buyers end up in court upon realizing their title deeds are invalid. Conducting thorough #DueDiligence is crucial to avoid land fraud. Allotment Letter holders can transfer land through registration via the Ardhisasa platform under the #NationalLandCommissionServices to obtain valid title deeds.

The Torino Case: From Trial Court to Supreme Court

Trial Court: Constitutional Petition No. 38 of 2011
Torino Enterprises Limited vs. The Honourable Attorney General

Timeline of Allocation
On 21st February 1964, a freehold title known as Embakasi L.R No. 11344 (Original No. 41/3), measuring 5639 acres, was granted to Kayole Estates Limited. This parcel was transferred to the Nairobi City Council (NCC) on 22nd November 1971. In 1973, it was subdivided into 8 parcels, including LR No. 22524 (83.910 Hectares), which was transferred to Renton Company Limited in 1999 via an Allotment Letter. Renton then transferred it to Torino Enterprises Limited in 2000 for Kshs.12,000,000. Torino claimed it received a title deed under the Registration of Titles Act on 26th April 2001.

In 2005, Torino argued that the Department of Defence (DoD) unlawfully fenced off 90 acres of its property. Torino contended that DoD’s actions were illegal, infringing on its constitutional property rights under Article 40 of the Constitution, and that DoD failed to comply with #CompulsoryAcquisitionProcedures.

Court Rulings
On 4th July 2011, the trial court ruled in favor of Torino, declaring the suit property a freehold private property and not public land. The court ordered the Respondent to restore possession to Torino or pay Kshs.1,530,000,000, the market value of the land. The Attorney General appealed this decision.

Civil Appeal No.84 of 2012
Attorney General vs. Torino Enterprises Limited (2019)

On 4th February 2022, the Court of Appeal overturned the High Court’s judgment, stating that the suit property was private land and not unalienated government land before NCC’s purchase in 1971. It held that the #CommissionerOfLands lacked authority to allocate it. The court found Torino was not an innocent purchaser, as it should have been aware of DoD’s occupation. Consequently, the #CertificateOfTitle issued to Torino was deemed illegal.

Supreme Court: Petition No. 5 (E006) of 2022
Torino Enterprises Ltd vs. The Attorney General

The Supreme Court concluded that an Allotment Letter cannot confer land interest and cannot be transferred until proper registration is completed. It determined that Torino was not an innocent purchaser and dismissed the appeal.

Similar Verdict in Dina Management Limited Case

In Dina Management Limited vs. The County Government of Mombasa & 5 Others (Petition 8 (E010) of 2021), the Supreme Court revoked a title deed due to non-compliance with legal procedures, emphasizing the #BurdenOfProving the #Legality and #Validity of a title rests with the buyer.

Conclusion

These precedents highlight the necessity for buyers to conduct thorough due diligence before purchasing property. WKA Advocates’ Real Estate, Conveyancing, and Construction Law department can assist with this process, ensuring compliance and reducing the risk of land fraud.

For further legal assistance or more information, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 035 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Can Widows Inherit from Their Parents-In-Law? in kenya

Following our recent publication, WKA Newsletter Edition #10 ‘Divorce by Mutual Consent in Kenya – Marriage (Amendment) Bill, 2023,’ we received a flurry of questions from you, our esteemed readers. One of the most common questions was, ‘Can a widow inherit from her parents-in-law?’ We found it important to address this pertinent issue.

In Kenya, there are two forms of succession: testate and intestate succession.

Testate Succession

Testate succession occurs when a person makes arrangements to ensure that upon death, their property passes to the person of their choice. These arrangements are made through a valid and enforceable will.

Intestate Succession

Intestate succession occurs under the following situations as provided under Section 34 of the Law of Succession Act:

1. A person dies without making a will.
2. Upon their death, the person’s will is invalidated or revoked.
3. The person fails to revive their earlier revoked will or make another will.

In most instances, a majority of Kenyans are not keen to write their wills, and hence they die intestate. This is evidenced by the large number of succession cases in courts where family members fight over inheritance. These cases drag on for years before the deceased person’s property is finally allocated to their rightful dependents.

Unfortunately, the most affected dependents are widows (mothers) who have to cater for their children’s needs while battling their in-laws in court to get a share of their spouse’s estate.

Recent Court Ruling

Recently, Justice William Musyoka tackled this issue in the case of Re Estate of Francis Andachila Luta (Deceased) (Succession Cause 875 of 2012) [2022], where the High Court declared that daughters-in-law are not entitled to a portion of their deceased parents-in-law’s estate in cases of intestacy, whether under the Law of Succession Act or customary law. The Honorable Justice stated:

“The protestor is not a child of the deceased. She is, therefore, not entitled to anything out of the estate of the deceased herein. She is a daughter-in-law of the deceased, as she was married to his late son, Henry Lisansa. She has not come out clearly to say who she represents in these proceedings, whether it is her children, the grandchildren of the deceased, or whether she represents the estate of her late husband, Henry Lisansa. She cannot speak for their children, because the said children are entitled to direct access to the estate, vide section 41 of the Law of Succession Act. If she purports to be pursuing the interest due to her late husband, then she will require to take out letters of administration in the estate of her late husband, in order to have authority to claim his stake in the estate…”

This means that if you are a married woman and your husband passes on, you cannot inherit from your parents-in-law if they die intestate. As a daughter-in-law, you will not be considered a dependent within the meaning of Section 29 of the Law of Succession Act. Note that these provisions also apply to widowers.

Rights of a Surviving Spouse in Intestacy

A surviving spouse is entitled to:

1. A life interest on the whole of the residue of the net estate. The ultimate destination of this property is to the deceased’s children.
2. The life interest of the surviving widow terminates upon her remarriage.

However, the case of Ripples International v Attorney General & another; FIDA (Interested Party) (Constitutional Petition E017 of 2021) [2022] introduced new developments in the interpretation of Sections 35, 36, and 39 of the Law of Succession Act. The Court declared Sections 35(1)(b), 36(1)(b), and 39(1)(a)(b) unconstitutional on grounds of gender inequality and must be interpreted in a manner that gives effect to the equality of women and men. This means that if a widower remarries, his life interest will also terminate just like that of a widow who remarries.

We hope this information helps answer your questions and understand the interesting developments in the Law of Succession Act, Cap 160. Please note that the contents of this newsletter are intended to provide a general guide to the subject matter and should not be relied upon without legal advice.

For further information or legal assistance on compliance or any other legal issue, kindly contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Kenya: President Signs the Climate Change (Amendment) Bill 2023 Ahead of International Climate Summit

The President of Kenya has signed the Climate Change (Amendment) Bill 2023 following its approval by the Senate. This Bill aims to amend the Climate Change Act of 2016 to regulate carbon markets, an area not addressed in the current Act.

The Bill aligns with the Paris Agreement, which Kenya ratified and became a party to on December 28, 2016. The Paris Agreement encourages parties to raise their mitigation ambition through carbon markets and non-market approaches.

Key Aspects of the Carbon Market Regulation

• Carbon Market Mechanism: The carbon market enables public and private entities to transfer and transact emission reduction units, mitigation outcomes, or offsets generated through carbon initiatives, programs, and projects. This is subject to compliance with national and international laws.
• Usage of Carbon Credits: Companies or individuals can use carbon markets to compensate for their greenhouse gas emissions by purchasing carbon credits from entities that remove or reduce greenhouse gas emissions.

The Presidential assent to the Bill comes days ahead of the African Climate Change Summit (ACS) 2023 and Africa Climate Week, scheduled from September 4 to 8, 2023, in Nairobi. This international event has garnered significant attention as climate change is a pressing global challenge.

We will attend the African Climate Change Summit (ACS) 2023 and keep you updated on the developments.

Conclusion

We hope this information helps in understanding the main objective of the Climate Change (Amendment) Bill 2023. Please note that the contents of this newsletter are intended to provide a general guide to the subject matter and should not be relied upon without legal advice.

For further information or legal assistance on compliance or any other legal issue, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

• William Karoki, Founding Partner
• Florence Mwende, Lawyer

Kenya: President Signs the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act 2023

In a significant move to enhance financial security and combat illicit activities, the President of Kenya officially signed into law the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act 2023 on September 1, 2023. This Amendment Act underscores Kenya’s commitment to strengthening its financial regulatory framework, fostering international cooperation, and aligning with global standards in the fight against money laundering, terrorism financing, and related illicit financial activities.

Prior to the enactment of the Amendment Act, the Law Society of Kenya (LSK) sought a court repeal of amendments compelling lawyers to disclose suspicious financial deals involving their clients. Consequently, the LSK agreed with the State to be designated as a self-regulating body in line with the Financial Action Task Force (FATF) standards, protecting client-attorney privileges.

Key Highlights of the Amendment Act

Beneficial Ownership

Limited Liability Partnership Act, 2011 (No. 42 of 2011):

• Definition: The Amendment Act defines a Beneficial Owner as “the natural person who ultimately owns or controls a legal person or arrangement or the natural person on whose behalf a transaction is conducted, including those who exercise ultimate effective control over a legal person or arrangement.”
• Register Requirements: Section 31B requires every limited liability partnership (LLP) to maintain a register of its beneficial owners and lodge a copy with the Registrar, both for proposed LLPs and existing LLPs within 60 days of the section coming into force.
• Update and Record Maintenance: LLPs must update the Registrar with any amendments to the register within 14 days and keep records for at least 10 years.
• Penalties: Penalties range from KES 100 for each day of default to a maximum of KES 500,000. The Registrar may also issue directives for compliance.

Foreign Limited Liability Partnership:

Section 34B(1)(b)(iv) mandates that applicants for foreign LLP registration submit a notarized copy of a list of beneficial owners and their particulars, along with other requirements.

Companies Act, 2015 (No. 17 of 2015):

• Register Requirements: Section 16A requires applicants for company registration to ensure compliance with beneficial ownership particulars. Section 93A mandates every company to maintain a register of its beneficial owners and lodge a copy with the Registrar, both for proposed and existing companies within specified time frames.
• Update and Record Maintenance: Companies must update the Registrar with any amendments within 14 days (30 days for public listed companies) and keep records for at least 10 years.
• Penalties: Similar to LLPs, penalties range from KES 100 per day of default to a maximum of KES 500,000, with additional directives for compliance.

Additional Highlights of the Amendment Act

1. Consensual Extradition: Fugitive criminals can now consent to extradition without formal proceedings, facilitated through Mutual Legal Assistance, streamlining international cooperation in combating cross-border crimes, including terrorism.
2. Enhanced Regulatory Authority: The Capital Markets Authority (CMA) and Insurance Regulatory Authority (IRA) have expanded powers to ensure licensee compliance with anti-money laundering and terrorism financing laws.
3. Operational Independence for the Financial Reporting Centre (FRC): The FRC gains operational independence, exempting it from the definition of a State Corporation, to strengthen its capacity to combat money laundering.
4. Strengthened Reporting Obligations: Reporting entities must promptly report suspicious transactions to the FRC, which will analyze these reports and coordinate with law enforcement agencies for appropriate action.
5. Central Bank Supervision: The Central Bank of Kenya (CBK) will oversee financial institutions and agents of reporting institutions to ensure compliance with anti-money laundering regulations.
6. Expanded Scope and Coverage: The Act broadens the definition of money laundering offenses to include proceeds from domestic and international criminal activities, terrorism financing, and corruption, addressing emerging threats in digital and cryptocurrency spaces.
7. Increased Penalties and Deterrents: The amendments introduce more severe penalties, including higher fines and extended prison terms, to deter illicit financial activities.
8. Enhanced Customer Due Diligence: Financial institutions and designated non-financial businesses must conduct thorough customer due diligence according to Know Your Customer (KYC) standards, promoting transparency.
9. Harmonization with FATF Standards: The legislation aligns Kenya’s licensing regime with FATF standards, establishing global standards to combat money laundering, terrorism financing, and financing of weapons of mass destruction.

Conclusion

We hope this information is helpful in understanding the key benefits of the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act 2023. Please note that this newsletter provides a general guide and should not be relied upon without legal advice.

For further information or legal assistance on compliance or any other legal issue, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

• William Karoki, Founding Partner
• Florence Mwende, Lawyer