The Insurance Regulatory Authority (IRA) has taken a significant step to protect Kenyan policyholders by signing a memorandum of understanding (MoU) with the Advocates Complaints Commission (ACC). This partnership aims to address the growing issue of advocates withholding compensation from settled insurance claims, a concern that has been compounded by insurers’ reluctance to cooperate with complaints investigations.
The MoU seeks to streamline the resolution of accident claims and enhance consumer protection. “The MoU formalizes the existing collaborative efforts between IRA and ACC to address concerns related to increased complaints against advocates, particularly in the settlement of insurance compensation claims,” the IRA stated.
In the year ending June 2023, the insurance sector was involved in 60 percent of the abuse of buyer power cases investigated by the Competition Authority of Kenya (CAK), with 68 out of 114 cases involving delayed payments.
The IRA highlighted that many complaints about advocates withholding compensation have been challenging to resolve due to insurers’ reluctance to provide necessary information to the ACC.
“A significant number of complaints lodged with ACC involve withholding of compensation by advocates from settled insurance claims. ACC has faced challenges in obtaining information regarding the status of settlement of claims from insurance companies, hindering its ability to effectively investigate and resolve these complaints,” the IRA noted.
Godfrey Kiptum, the Commissioner of Insurance, emphasized that this partnership is crucial in maintaining the integrity and accountability of the insurance industry.
“This partnership is a critical step in our ongoing efforts to ensure that the insurance industry operates with the highest levels of integrity and accountability. We are committed to addressing any gaps that allow for the exploitation of policyholders and ensuring that justice is served,” Kiptum said.
The partnership includes a commitment from the IRA to ensure that insurance companies cooperate with the ACC when requested, strengthening transparency and fair treatment of policyholders. In cases where insurers are uncooperative, the ACC can now formally request IRA’s intervention.
Moses Cheboi, Chairman of the ACC, expressed optimism about the collaboration, noting that it would empower the commission to more effectively investigate complaints regarding the remittance of insurance compensation by advocates
. “This MoU provides us with the necessary tools and support to effectively investigate and resolve complaints, particularly those involving the remittance of insurance compensation by advocates. We look forward to a fruitful collaboration that will ultimately benefit the public,” he said.
