The Insurance Regulatory Authority (IRA) has placed Resolution Insurance Company Ltd under statutory management.
IRA says the company has been facing a number of challenges, particularly relating to its inability to meet its obligations and mitigate its inherent risks prompting the regulator to intervene on several occasions.
“Despite the various intervention measures taken as provided for by the Insurance Act, Resolution Insurance Company Limited has continued to slide into operational and financial difficulties,” IRA said in a statement.
“In particular, the company is not able to settle claims to the detriment of claimants, policyholders, and other creditors. The insurer is also not able to comply with statutory requirements relating to capital adequacy, submission of returns, and governance structures.”
The commissioner of Insurance has appointed the Policyholders Compensation Fund (PCF) as the Statutory Manager of Resolution Insurance Company Limited for a period of twelve (12) months commencing 5th April 2022.
The PCF is a State Corporation set up pursuant to Section 179 of the Insurance Act to provide compensation to the claimants of an insurer placed under Statutory Management.
Going forward IRA notes that Resolution Insurance Company Limited is not authorized to transact any new insurance business.
”Claims payable by PCF will be capped at Ksh 250,000. All inquiries relating to the company may be referred to the Statutory Manager for further direction.” Read the statement.
According to IRA, ”Despite the various intervention measures taken as provided for by the Insurance Act, Resolution Insurance Company Limited has continued to slide into operational and financial difficulties.” Read the statement.
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