By Patricia Mollyne Mataga
The Insurance Regulatory Authority has issued a statement responding to the surprise shutdown of Directline Assurance.
Chairperson of Royal Credit Limited, which owns the insurance company SK Macharia on Monday announced its closure, sparking uproar amongst players in the public transport industry. This is due to the fact that over half of the Public Service Vehicles (PSVs) are insured by the company.
But in a statement on Tuesday, June 11, 2024, IRA declared the said announcement null and void.
“The purported actions are null and devoid of any legal effect and as such, the insurer continues in full operations as licenced and approved by the authority,” IRA said in part of its statement.
“The purported transfer of the assets of the insurer to any third party is therefore null and void ab ignition,” it added.
SK Macharia when announcing the shutting down of Directline Assurance company said its assets had been moved to Royal Credit Limited.
However, IRA insists all policies issued by the company remain in full force and effect, and that the insurer remains liable for any claims arising therefrom.
Data shows that over 60 per cent of the PSVs in the country have Directline Assurance company’s insurance.
The abrupt move by the company to stop its operations would have negatively impacted in the operations of the said PSVs as they would be required to apply for a new insurance cover.
However, with the latest development, IRA notes that the assurance company has been placed under heightened surveillance and that “the authority will take necessary steps as may be appropriate, to ensure sustainability of the insurer and protection of insurance policyholders’ intrests.”
SK Macharia in his announcement said all staff at the company had been laid off, in a move linked to the freezing of the company’s bank accounts by the Insurance Regulatory Authority (IRA).