Nairobi, Kenya – The Policyholders Compensation Fund (PCF) has recently disbursed Sh.93.18 million to policyholders affected by the collapse of three insurance companies. This payout, addressing claims as of June 30, 2023, marks a significant step in supporting those impacted by the failures of these firms.
According to Kenya News Agency, 778 policyholders have benefited from this distribution. The majority, 724 former clients of the now-defunct Resolution Insurance Company, received Sh.82.21 million. The Insurance Regulatory Authority (IRA) had placed Resolution Insurance under statutory management in April 2022 due to financial difficulties. Additionally, PCF compensated 45 claimants of Concord Insurance, which collapsed in 2013, with Sh.9.02 million, and 9 policyholders of Standard Assurance, which failed in 2008, also receiving Sh.9.02 million. Both Concord and Standard Assurance are currently under liquidation, and their licenses have been revoked.
Rosemary Kavili, Deputy Director of Corporate Communications at PCF, urged policyholders with outstanding claims against these companies to submit their claims within two years to qualify for compensation. She emphasized the urgency of this process during a five-day sensitization campaign in Kisumu County from December 4 to 8.
Ms. Kavili noted that the PCF, established in 2005, aims to bolster public confidence in the insurance sector by providing compensation for claimants of insurers under statutory management or those whose licenses have been canceled. She revealed that the fund has accumulated Sh19.1 billion from levies imposed on insurance companies and policyholders, which is used to compensate affected clients in the event of an insurance firm’s collapse. Insurers and policyholders contribute a 0.25 percent levy on premiums underwritten towards the fund.
Currently, PCF awards a maximum compensation of Sh250,000 per general insurance claim. Those with claims exceeding this limit must await the auctioning of the company’s assets through the liquidation process. Additionally, IRA has approved PCF to start processing compensations for policyholders of United Insurance and Blue Shield Insurance, both under statutory management.
The campaign ‘PCF Mtaani’ aims to raise awareness among various stakeholders, including the media, insurance agents, boda boda riders, matatu owners, Deputy County Commissioners, Chiefs, and representatives from different community groups. This initiative highlights the challenges faced by the insurance sector in Kenya, including fraud, underpricing of products, poor corporate governance, inadequate investment strategies, and economic downturns.