Resolution Insurance has collapsed with over kes 6.5 billion in client cash, insurance claims, and creditor funds after its shareholders failed to recapitalise the business.
The company has been facing a number of challenges, particularly relating to its ability to meet its obligations and mitigate its inherent risks.
The Insurance Regulatory Authority (IRA) said the insurer had collected kes 4.1 billion in premiums from policyholders out of which 90 per cent were medical customers.
“Resolution Insurance owed creditors, had incurred claims worth kes 2.5 billion and had collected premiums worth kes 4.1 billion as of December 31, 2020. The majority around kes 3.5 billion comes from medical business,” the IRA said.
Among the long list of clients and suppliers owed by the failed insurance firm include creditors as well who had claims worth kes 2.5 billion
The Policyholders Compensation Fund (PCF), which has taken over the firm as the statutory manager, said the company presented the liabilities to the regulator but it will conduct an independent audit to verify the actual size of the claims. Next week, PCF is expected to announce the total value of compensation to policyholders –which will be capped at kes 250,000 for each client.
However, creditors and policyholders with higher value claims will have to wait for the liquidation of the business to see how much more they can recover.
This comes shortly after IRA placed the failed insurer under Statutory Management, and appointed the Policyholders Compensation Fund (PCF) as the Statutory Manager for a period of 12 months.
