Matatu owners petition Parliament over 'broken' PSV insurance system
The petitioners highlighted the collapse of several PSV insurers over the past two decades citing widespread fraud.
Matatu owners have petitioned Parliament, citing systemic failures and unfair practices in the regulation and management of public service vehicle (PSV) insurance.
According to the petitioners, unresolved claims, rampant fraud and undercutting of premiums are crippling the sector and leaving accident victims uncompensated.
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In a session with the Committee on Public Petitions on Tuesday, the Federation of Public Transport Sector (FPTS) and the Association of Kenya Insurers (AKI) said the current framework for PSV insurance is inadequate and requires urgent reform.
FPTS Chief Executive Officer, Kushian Muchiri, urged Parliament to review several laws, including the Insurance (Motor Vehicle Third Party Risks) Act, the Insurance Act, the Traffic Act and the Small Claims Court Act, to improve accountability, fairness and transparency in motor insurance claims.
He argued that the present framework for personal injury claims has created opportunities for abuse and fraud, harming both insurers and genuine accident victims.
Procedurally inadequate
Muchiri also criticised the use of Small Claims Court procedures for personal injury cases, calling them “procedurally inadequate” because insurers are denied the right to cross-examine witnesses and verify evidence such as medical reports and contributory negligence.
The petitioners highlighted the collapse of several PSV insurers over the past two decades, including Invesco, United, Xplico, Blueshield, and Concord, citing widespread fraud, unsustainable premium undercutting and lack of digital infrastructure to track claims as key reasons.
AKI Executive Director, Tom Gichuhi, supported several points in the petition, noting that fraud and premium undercutting have made PSV insurance unprofitable. He called on Parliament to empower the Insurance Regulatory Authority (IRA) to issue premium pricing guidelines and strengthen coordination with the National Transport and Safety Authority (NTSA) and the National Police Service in verifying claims.
Committee Chairperson Karemba Muchangi said the issues raised by Matatu owners are part of a larger national problem.
“The Association of Matatu Owners is rightfully before us seeking intervention because there is a need for proper regulation of the sector. The issue of unsettled claims is a national problem that must be addressed,” he said, questioning why Matatu operators continue paying premiums when claims remain unresolved.
Members of the Committee also called on the Matatu industry to improve self-regulation and enforce discipline among operators to reduce road risks.
Turbo MP and Committee Vice Chairperson, Janet Sitienei, linked many PSV accidents to operator carelessness.
“It is you, the officials seated here, who can push the various Matatu operators to follow rules and ensure passengers are served safely and responsibly,” she said.
Kangema MP Peter Kihungi urged closer collaboration among the IRA, NTSA and the Ministry of Transport to address sector challenges rather than apportion blame.
The Committee resolved to invite the Insurance Regulatory Authority to present its position on the petition in a future sitting.
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