Directline Assurance still operational, says Insurance Regulatory Authority
By Maureen Kinyanjui |
In a statement on Tuesday, IRA Chief Executive Officer Godfrey Kiptum said the company's declaration of closure was null and void.
The Insurance Regulatory Authority (IRA) revoked Directline Assurance's closure a day after the company made the announcement and fired all employees.
In a statement on Tuesday, IRA Chief Executive Officer Godfrey Kiptum said the company's declaration was null and void.
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"The purported actions are null and devoid of any legal effect and as such, the insurer continues in full operation as licensed and approved by the authority," he said.
" The purported transfer of the assets of the insurer to any third party is therefore null and void ab initio (from the beginning)."
Directline is said to control more than 60 per cent of the public service vehicles (PSVs) insurance market.
Monday's company closure announcement was made by Samuel Kamau (SK) Macharia, chairperson of Royal Credit Limited, which owns the insurance company.
He said all of Directline's employees had been terminated and declared the immediate dissolution of the Board of Directors, with Royal Credit Limited set to take over all assets.
Macharia said the move was prompted by the IRA's freezing of the company's bank accounts.
The IRA, however, announced that all policies issued by Directline remained in full force and effect and that the insurer remained liable for any claims arising therefrom.
"All policyholders of the insurer may continue with their operations in accordance with their insurance contracts," Kiptum said.
He noted that the IRA had the sole statutory mandate to approve, suspend or cancel the operations of any insurance company in Kenya.
In addition, the IRA said the insurer had placed Directline under heightened surveillance.
"The authority will take necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure the sustainability of the insurer and protection of insurance policyholders' interests," Kiptum added.
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