Kenyan insurer Invesco Assurance Company has been placed under statutory management by the Insurance Regulatory Authority (IRA), a move aimed at stabilizing the company’s operations following significant financial challenges. The insurer, which has been grappling with liquidity issues, is the latest in a series of Kenyan companies to face regulatory intervention due to financial instability.
The insurer has been prohibited from entering into any new insurance contracts effective August 14, 2024, according to Godfrey Kiptum, Commissioner of Insurance at the Insurance Regulatory Authority (IRA). Additionally, the IRA has appointed the Policyholders Compensation Fund (PCF) as the Statutory Manager for the firm.
“Invesco Assurance Company Limited (under statutory management) is not authorized to enter into any new insurance contracts from 14th August 2024,” Commissioner of Insurance and IRA chief executive, Godfrey Kiptum, said in a public notice. “The insurer’s existing policyholders are advised to immediately seek alternative covers from other licensed insurers to ensure that there is no unnecessary exposure.”
The Policyholders Compensation Fund (PCF) will now start compensating the affected claimants, as required by the Insurance Act, Cap 487 of the Laws of Kenya.
Invesco’s financial troubles are not new. The company, which specializes in offering motor vehicle insurance, particularly for public service vehicles (PSVs), has been facing financial headwinds for several years.
Invesco has been under scrutiny by the regulator and was once placed under liquidation. The company has also faced fines for breaching operating terms. In December of last year, Invesco turned to the High Court after the Insurance Regulatory Authority (IRA) halted its issuance of new policies. This action followed the insurer’s record of unpaid claims, which had accumulated to over 3.9 million in outstanding liability claims. However, by March 2024, this figure had been reduced to 3.74 million.
This comes at a time when insurance companies are facing financial losses amid a tough economic environment. In December of last year, the Insurance Regulatory Authority (IRA) also placed Xplico Insurance under statutory management, appointing the Policyholders Compensation Fund (PCF) as the Statutory Manager.
The insurer’s troubles began when a creditor, Doris Mwaka Mwakwekwe, filed a liquidation petition on March 17, 2022. This petition was subsequently heard by the High Court in Malindi on June 9, 2022.
The IRA’s decision to intervene in Invesco’s operations reflects the regulator’s increased vigilance in overseeing the insurance sector. In recent years, the authority has stepped up its efforts to ensure that insurers maintain adequate capital levels and operate within the framework of regulatory requirements.
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