Insurance in Lesotho

Lesotho has a formal insurance market governed mainly by the Insurance Act 2014. The CBL supervises insurers and intermediaries through its Insurance Supervision Division and protects financial consumers through its Financial Consumer Protection Division. The CBL register lists 10 insurance companies: four short-term insurers and six long-term insurers, together with 52 insurance brokers. The register should be checked before buying cover because only licensed providers and authorized intermediaries are protected by the local regulatory framework. Short-term or general insurance can cover property, accidents and health, motor vehicles, transport, engineering risks, liability, guarantees and miscellaneous risks. Long-term insurance includes life, health, assistance, disability, fund and sinking-fund products. Micro-insurance may include funeral cover, crop insurance, credit life, savings life, health insurance or other products, but the actual cover depends on the provider and policy wording. Premiums and deductibles do not follow one nationwide table; the price depends on the risk, product, sum insured, exclusions, term and underwriting assessment. Insurance access normally runs through a CBL-listed insurer, licensed broker or licensed agent. A broker may arrange cover outside Lesotho only when the required cover is demonstrably unavailable locally and the insured gives written confirmation. An unlicensed foreign policy is not protected by the Insurance Act in the same way as locally regulated cover. Before signing, the provider should give a Key Fact Statement and disclose material terms, fees and other monetary obligations in clear language. An authorized intermediary's receipt of the premium counts as payment to the insurer. Policyholders must pay premiums on time, provide truthful information and follow the policy's exclusions, notification periods and claim requirements. A policyholder has five working days after entering the contract to cancel under the financial consumer protection guidance. If the provider changes terms or conditions, it should give at least 30 days' notice. Providers may not impose undisclosed fees or discriminate unlawfully. The policy itself remains the main source for cancellation, renewal, variation, coverage limits and claim deadlines because Lesotho has no general standardized switching or portability routine established in the reviewed sources. A claim usually starts with the insurer or intermediary's claim form and supporting evidence. The provider should give status updates and settle fairly without unnecessary delay. A rejection should be written, explain the reason and state the available review or appeal process and applicable time limits. The insurer or intermediary must keep a complaint record and operate an internal resolution process. If the response is unsatisfactory or the complaint has been delayed for more than 30 days, the policyholder can escalate it to the CBL by sending a signed complaint letter, the provider's reference or response, the policy and relevant evidence to registry@centralbank.org.ls. Motor insurance has a specific statutory role. Vehicle licensing or renewal requires valid insurance, and the Motor Vehicle Insurance Order No. 26 of 1989 provides the existing framework for third-party injury claims. After an accident, a claim for injury or damage to another person should be reported to the responsible registered insurer under the Order. Limitation and prescription rules need to be checked carefully because the existing system has faced delays, coverage gaps and identification problems. In 2026, the government was collecting comments on a proposed Motor Vehicle Accident Fund policy, but the reviewed material does not establish a replacement law already in force. The Workmen's Compensation Act 1977 requires employers other than the Government to insure their liability for employment injuries. The responsible insurer must be approved by the Minister, and the Labour Commissioner handles disputes about medical aid. This employer-liability arrangement is not universal social insurance. Occupational retirement protection is also separate: the Pension Funds Act 2019 provides the framework for pension funds under CBL supervision, with 12 pension funds and four administrators recorded in the research. These funds can support income in retirement but do not replace general social insurance. The Old Age Pension is a separate public income-support arrangement. It is universal for citizens over 70, except civil-service retirees, and it is not funded through contributions or a private insurance policy. The Social Protection Strategy II includes a planned retirement benefit within a wider social-security package and discusses access for informal workers and pilot implementation, but the reviewed evidence does not confirm a functioning nationwide contribution-based social-insurance system. The Insurance Act also requires registration, capital, solvency, reserves, reinsurance and reporting, and 2024 amendments added beneficial-owner and tax-clearance requirements for market entry. Operating an insurance business without a licence is an offence carrying a possible fine of M500,000, imprisonment for 10 years, or both.