Insurance Regulatory Authority CEO Godfrey Kiptum. FILE PHOTO | NMG
Thousands have failed to show up for the Sh250,000 State payout of Concord Insurance that collapsed eight years ago, indicating apathy among claimants who have waited years for compensation.
Only eight of the 2,949 policyholders have come out to claim the Sh247 million set aside from the Policyholders Compensation Fund (PCF).
PCF managing trustee William Masita said the fund and the regulator are considering extending the period for making claims beyond 30 days due to the fresh coronavirus lockdown measures and to allow for more publicity on the payouts.
“The policyholders were supposed to download the forms and return (them) to us for a period of 30 days. This process has been going on but unfortunately, the take-up has not been what we expected we have received only eight forms so we are doing additional media campaigns to ensure the returns are increased,” said Mr Masita in an online meeting last week.
“We are considering extending the period on the fact that there were certain restrictions given on Covid-19 containment from Friday that we had not foreseen earlier so it affects claimants who may wish to visit the office from areas beyond the five counties.”
Over the years Blue Shield Insurance, United Insurance Company, Standard Assurance Company, Concord Insurance Company, Access Insurance Company, Stallion Insurance Company Ltd and Lakestar Insurance Company all went under with policyholders claims.
They were put on receivership but their shareholders and the regulator have been caught up in endless litigation leaving policyholders to wait decades without recovering their money.
This was despite the setting up of the PCF in 2005 to cushion holders of insurance policies if companies are unable to discharge their services.
Insurance companies contribute to PCF through the payment of a levy equivalent to 0.25 per cent of their premium receipts and has amassed Sh13.5 billion by December last year.
Last year, authorities changed the law paving way for payment to policyholders immediately an insurance company went down.
The change in law, however, would not apply retrogressively meaning legacy failures have to wait until the court liquidated them to issue compensation to shareholders.
The Insurance Regulatory Authority began processing claims of companies that have gone bust over the years and have been wound up beginning with Concord.
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