The Commissioner of Insurance has placed Resolution Insurance Company Limited under Statutory Management, and appointed the Policyholders Compensation Fund (PCF) as the Statutory Manager for a period of 12 months, starting 5th April 2022.
The company has been facing a number of challenges particularly relating to its ability to meet its obligations and mitigate its inherent risks.
In particular, the Insurer is is not able to settle claims, and comply with statutory requirements relating to capital adequacy, submission of returns, and governance structures.
The Insurer is, henceforth, not authorized to transact any new insurance business. All existing policies also cease to exist from 5th April 2022.
Last month, the Insurer announced that it had stopped underwriting non-medical covers for three months as it sought fresh capital injection.
Latest data from the Insurance Regulatory Authority shows the insurer reported an underwriting loss of KSh457.32 million in the financial year ended December 2021, with 11 out of 12 classes of insurance posting losses.
Resolution Insurance was founded in 2002 by Peter Nduati as a medical insurance provider in Kenya, changing its name to Resolution Insurance in 2013 as it expanded into East Africa.
The PCF is a State Corporation that provides compensation to the claimants of an insurer placed under Statutory Management. Claims payable by PCF will be capped at KSh250,000.