Connect with us

Business

Resolution Insurance falls apart with Sh6.6bn clients’ funds

Published

on

By Judith Gicobi

After its shareholders failed to recapitalize the corporation, Resolution Insurance crumbled with approximately Sh6.5 billion in client cash, compensation claims, and creditor monies.

The Insurance Regulatory Authority (IRA) said that the insurer had acquired Sh4.1 billion in premiums from policyholders, with medical clients accounting for 90% of the total.

The company owed creditors Sh2.5 billion and had insurance claims totaling Sh2.5 billion, indicating the extensive list of clients and suppliers anxious to get their money back from the failing insurer.

The Policyholders Compensation Fund (PCF), which has assumed over the company as the statutory manager, said the firm reported the liabilities to the regulator, but that it will perform an independent investigation to validate the allegations’ exact nature.

The entire value of settlement to policyholders – that will be restricted at Sh250,000 per client – is scheduled to be released next week by PCF.

Debtors and policyholders with higher-value disputes will await until the company is liquidated to see how much extra they can get.

“Resolution Insurance owed creditors, had incurred claims worth Sh2.5 billion, and had collected premiums worth Sh4.1 billion as of December 31, 2020. The majority around Sh3.5 billion comes from medical business,” the IRA said.

Clients with the most vulnerability at Resolution include individuals who have high-value properties covered, like cars, residences, and industrial buildings.

Clients who have hospital expenses will be affected as well, as they will be required to pay them out of pocket.

Resolution is the first underwriter to go out of business following a period of relative stability in the industry following the downfall of Concord Insurance in 2013.

READ ALSO  Nominated Senator Victor Prengei dies in accident

Following a string of failures, notably United Insurance in 2005, Standard Assurance in 2009, and Blueshield in 2011, the PCF was established 17 years ago to protect insurance policyholders when firms fail to satisfy their responsibilities.

Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

AMG Realtors will deliver your Title Deeds anywhere in the world

You can easily own one of these

Like us on FB

Copyright © 2021 Kenya Satellite News Network. All Rights Reserved.