LSK wants insurance agency powers clipped.
The Law Society of Kenya wants the Insurance Regulatory Authority stripped of powers to appoint statutory managers to run the affairs of financially unstable underwriters.
The LSK has sued the IRA, the Policy Holders Compensation Fund and the Attorney General. LSK chief executive Mercy Wambua says the IRA has abused its power to appoint statutory managers to handle unstable insurers by placing them under unreasonably lengthy receivership spells.
She said the move has delayed compensation of accident victims. The IRA is yet to respond to the suit, but the Attorney General's office wants the case dismissed. The AG's office says any extension of receivership granted by the High Court has been justified by the IRA.
The LSK holds that various underwriters that mostly dealt with PSVs have since 2005 been placed in receivership, but no solution to their predicament has been forthcoming.
Wambua lists United Insurance Company, Standard Assurance Company, Blue Shield Insurance Company and Concord Insurance Company as the firms whose statutory managements have been continuously extended.
'As a result of the actions of the IRA, Commissioner of Insurance and the PHCF, LSK members have been deprived of their livelihood, legal fees and their ability to serve their clients diligently. Accident victims have been unable to recover compensation,' the LSK says. Wambua says public confidence in the insurance sector has been eroded.
The LSK says the IRA has been unable to take early action that would have rescued some troubled underwriters. It says the IRA has in the recent past received reports from the DCI, detailing irregular activities at Xplico Insurance, but is yet to lift a finger, something the Society says has left the underwriter's clients exposed to losses.
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|Publication:||The Star (Nairobi, Kenya)|
|Date:||Mar 1, 2018|
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