The Commissioner of Insurance Godfrey Kiptum has placed Resolution Insurance Company Limited under Statutory Management.
The company has been facing a number of challenges, particularly relating to its ability to meet its obligations and mitigate its inherent risks, inviting the Commissioner 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. 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,” said Kiptum.
“The Authority has had numerous engagements with the Management and Board of the Msurer to seek solutions to salvage the company. The Authority has also considered the various initiatives undertaken by the shareholders to inject capital into the company. Unfortunately, all these measures have not been successful.”
“Having considered the continued high risk and consumer exposure posed by the insurer, the Authority has, in the best interest of the public, placed Resolution Insurance Company LMlited under Statutory Management as provided for under Section 67 C (2) (i) of the Insurance Act. This decision is in furtherance of the Authority’s commitment to ensure that policyholders and insurance beneficiaries are protected,” added Kiptum.
Resolution Insurance has as a result been barred from transacting any new insurance business.
The Commissioner of Insurance has appointed the Policyholders Compensation Fund (PCP) as the Statutory Manager of Resolution Insurance Company Limited for a period of 12 months commencing April 5, 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. Claims payable by PCF will be capped at Ksh250,000.
All existing policies cease to exist from April 5, 2022.