Insurance agents affiliated to the Bima Intermediaries Association of Kenya (BIAK) have criticised the Insurance Regulatory Authority (IRA) for the abrupt closure of three insurance companies, warning that the move has left thousands of policyholders in limbo.
According to BIAK Chairman Washington Ndegea, the decision by the regulator to place KUSCCO Mutual Assurance Limited, Corporate Insurance Company Limited, and Trident Insurance Company Limited under statutory management was carried out in an unethical and unprofessional manner.
In an interview with journalists, Ndegea said that the regulator ought to have engaged the industry players first and given the affected insurance companies time to prepare the policyholders to seek alternative insurance cover before taking the drastic decision.
“This goes against the mandate of the IRA of taking care of the industry players. It puts the clients under insurance risk because the customer is not covered and there was also no warning regarding what the regulator did,” said Ndegea.
“By shutting down those three insurance companies, the agents and brokers were left with no way of preparing their clients to look for insurance elsewhere, and that is why we are saying it was unethical and unprofessional for the regulator to do that,” he added.
Ndegea was responding to the March 10 decision by IRA to shut down operations for the three insurance companies, citing continued financial instability and failure to meet IRA solvency requirements.
The regulator also barred the three companies from writing new policies, effectively putting them out of business.
In a statement, the Authority also appointed the Policyholders Compensation Fund (PCF) as the statutory manager for the three insurance companies.
The Policyholders Compensation Fund will be responsible for compensating the affected claimants and will advise the long-term policyholders on the resolution of the outstanding obligations of the companies to the clients.
The authority noted the action was taken with the view of safeguarding the interests of policyholders, creditors, and the general public. Further, according to the IRA, the decision would allow for an orderly assessment and stabilisation of the companies’ financial and operational positions.
“KUSCCO Mutual Assurance Limited, Corporate Insurance Company Limited, and Trident Insurance Company Limited are not authorised to enter into any new insurance contracts from March 11, 2026.
The insurer’s existing policyholders are advised to immediately seek alternative covers from other licensed insurers to ensure there is no unnecessary exposure,” read the statement by the Commissioner of Insurance Godfrey Kiptum.
Ndegea said that the actions by the regulator will have far-reaching implications on the insurance sector. He said that already, the closure has eroded the public’s confidence in the insurance sector and caused unnecessary alarm among policyholders.
In addition, he said that close to 600 employees who depended on the companies for income are now staring at unemployment.
“The regulator should have first warned us and given us a three-month grace period to ensure that the clients look for insurance elsewhere,” he said and called on IRA to reverse the decision and allow the companies to resume operations temporarily to allow existing policies to mature.
He vowed to escalate the matter to consumer protection bodies if the situation is not addressed.
“The only thing that we are asking for right now is for the authority to make sure that these companies resume business until they complete whatever policies were active or at least for the next one year so that people can continue enjoying their cover. What we are saying is that our clients and brokers should not get inconvenienced by the actions of IRA,” said Ndegea.
