A Nairobi lawyer has petitioned the High Court against the Insurance Regulatory Authority's move to take control of three insurers, arguing that it unlawfully invalidated existing policy coverage, exposing policyholders to unnecessary risks and costs.
A Nairobi lawyer has gone to the High Court to challenge the Insurance Regulatory Authority’s decision to place Trident Insurance Company, KUSCCO Mutual Assurance and Corporate Insurance Company under statutory management, arguing that policyholders were left exposed when existing cover was treated as no longer valid before expiry.
Christopher Njoroge Kimiti says the regulator acted unlawfully when it moved on 10 March to take control of the three insurers and, in effect, told customers to obtain replacement cover elsewhere. In his petition, he argues that the step went beyond the IRA’s powers because it interfered with private insurance contracts that had been entered into while the firms were still licensed.
The case was triggered for him personally after a traffic stop on 13 March, when he says an officer alleged he was driving without valid insurance. He told the court he had to obtain temporary cover from another insurer on the spot, and argues that the regulator’s action exposed him and other customers to unnecessary cost, possible liability and the risk of losing protection on assets they believed were insured.
The IRA had said in a public notice that the companies were being placed under statutory management because of breaches and weak capital positions, with the Policyholders Compensation Fund taking over oversight. Reporting by Kenyan media later indicated that the PCF assumed control of the three firms and imposed a six-month moratorium on claims payments, while the insurers were also barred from writing new business from 11 March. Kimiti is now asking the court to declare the cancellation of existing policies unconstitutional and to require police to treat those policies as valid until they expire or the firms are formally wound up.
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Source: Noah Wire Services
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