IRA Revokes Closure of Directline Assurance
by Ian Elroy Ogonji June 11, 2024 · News
The Insurance Regulatory Authority (IRA) has dismissed reports on the closure of Directline Assurance company hours after an announcement by Royal Credit Limited that the insurance firm had closed operations and fired all employees.
IRA CEO Godfrey Kiptum in statement said that the purported actions are null and devoid of any legal effect and as such the insurer continues in full operation as licensed and approved by the Authority.
“All policies issued by Directline Assurance Company Limited remain in full force and effect and the insurer remains liable for any claims arising there from,” said Kiptum.
“All policies issued by Directline Assurance Company Limited remain in full force and effect and the insurer remains liable for any claims arising therefrom. All policyholders of the insurer may continue with their operations in accordance with their insurance contracts,” the IRA CEO added.
The regulator said it has placed Directline Assurance under heightened surveillance and it will take necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure sustainability of the insurer and protection of insurance policyholders’ interests.
Media mogul SK Macharia, who is also the chairman of Royal Credit Limited – one of the shareholders of Directline, announced on Monday that the insurer had closed operations and laid off all its staff.
“The board of directors of Directline has been dissolved and all the assets taken over by Royal Credit Ltd. All employees have been dismissed, and Directline will no longer issue insurance services,” Mr Macharia said.
Macharia said the action was prompted by the closure of all Directline Insurance accounts by the Insurance Regulatory Authority (IRA) and failure by the insurance regulator to take action against directors of Directline for allegedly misappropriating KSh 7 billion.
The announcement caused widespread panic, particularly in public transport, since the firm dominates the public service vehicle insurance market.
IRA now says it has placed Directline Assurance under heightened surveillance and it will take necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure sustainability of the insurer and protection of insurance policyholders’ interests.
Insurance Regulatory Authority is a State Corporation established under the Insurance Act, with the mandate to regulate, supervise and promote development of the insurance industry in the country by ensuring industry stability and market confidence.
