Resolution Insurance claimants seek Ksh.190.5 million compensation

Claimants in the beleaguered Resolution Insurance are expected to make claims totaling to Ksh.190.5 million from the Policyholders Compensation Fund (PCF).

According to the statutory fund, a total of 1,925 claims are expected from policyholders at Resolution Insurance as per projections as of June 8, 2022.

The fund is meanwhile expected to meet Ksh.107.6 million in payments to the policyholders, representing a coverage rate of 56.5 per cent.

PCF Managing Trustee William Masita however says the fund is still carrying out an audit to determine total claims by policyholders in the underwriter which was placed under regulatory management on April 5, 2022.

“We have commenced an audit of Resolution to determine the quantum of claims to verify the reports we have currently,” he said.

At present, the PCF says it has received 245 claims from Resolution policyholders and has since processed 88 of the claims whose value stands at Ksh.15 million.

Meanwhile, the fund has only paid out claims of Ksh.8 million from the collapse of Concord and Standard Assurance.

“For Standard and Concord, we started compensation last year in August but we continue to see apathy for two insurers because of the long duration in statutory management,” added Mr. Masita.

The PCF estimates total claims from troubled and defunct underwriters including Blue Shield and United Insurance at 14,395 or an equivalent of Ksh.4.2 billion in value from which the fund can pay out Ksh.2.7 billion or 64.4 per cent of the claims.

Blue Shield Insurance holds the bulk of claimants at 8,150 with a total value of Ksh.2 billion.

PCF is currently the statutory manager of Blue Shield, United Insurance and Resolution Insurance as of July 2014, June 2015 and April 2022 respectively.

The Commissioner of Insurance however faces petitions for winding up Blue Shield and United, stalling down the process to compensate policyholders.

On Thursday, the PCF unveiled a new strategy which is centred on easing the process of making claims by policyholders to the fund.

“The idea here is to raise the confidence of the insurance industry, which means when a claim is made, you don’t take too long to pay. There are certain steps to take in verifying claims,” noted PCF Chairperson FCPA Muthoni Wangai.

The PCF pays a maximum of Ksh.250,000 from claims made by policyholders in troubled insurers while the fund is monetized by contributions equivalent to 0.5 per cent of total written premiums by underwriters.

Presently, PCF has Ksh.16 billion in liquid funds, Ksh.4.2 billion of which represents the quantum of compensation.

The fund is expected to employ actuaries to determine if the Ksh.250,000 compensation ceiling is adequate.