Crisis-saddled Resolution Insurance has been placed under statutory management for a period of 12 months starting April 5, 2022.
The Commissioner of Insurance has appointed the Policyholders Compensation Fund (PCF) as the statutory manager of the underwriter which has been struggling to stay afloat in recent times.
“PCF has forthwith taken over the operations of the company and has deployed necessary resources to ensure that the company assets and records are preserved for the benefit of policyholders, claimants, and other stakeholders,” the statutory manager said.
PCF noted that it will initiate compensating policyholder claims within the next fourteen (14) days.
Resolution Insurance has been struggling to pay claims to policyholders, claimants, and other creditors besides breaching statutory obligations to submit returns to the regulator.
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The Insurance Regulatory Authority (IRA) also notes that the firm has also not been able to comply with statutory requirements relating to capital adequacy, and governance structures.
The Authority said it has convened a number of engagements with the Resolution’s chiefs to find a solution all in vain.
“The authority has, in the best interest of the public, placed Resolution Insurance Company Ltd 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,” explained IRA in a note to newsrooms.
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 Kes250,000.