Resolution Insurance Clients to Get Upto Ksh250,000 Each – How to Claim

Days after the Insurance Regulatory Authority (IRA) announced that Resolution Insurance had entered receivership, its newly appointed statutory manager – the Policy Holders Compensation Fund – has offered direction on the way forward for clients who held policies with the fallen insurer.

The collapse of Resolution Insurance followed its failure to settle claims or honor obligations to creditors. There had been mounting complaints from consumers to the IRA over alleged breaches of contracts.

The Policyholders Compensation Fund  (PCF) noted in a statement that Resolution policyholders would receive a maximum of Ksh250,000 for unsettled claims. They will, however, need to provide proof of the claims.

The amount a policy holder can receive is capped at Ksh250,000 in line with provisions of the Insurance Act.

Policy holders who had taken out covers on high-value assets including vehicles will likely be exposed. While it made its biggest impact in the health insurance business, Resolution had also ventured into the general and  medical insurance business.

PCF had earlier announced a 12-month moratorium on all payments related to Resolution Insurance.

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“PCF has forthwith taken over the operations of the company and  has deployed necessary resources to ensure that the company assets and records are preserved for the benefit of policyholders, claimants and other stakeholders.”

“Pursuant to the appointment, PCF has declared a moratorium on payments by the said insurer to its policy holders and all other creditors for a period of  twelve (12) months starting today,” it noted after being appointed statutory manager.

Barely a week before IRA announced that Resolution had entered receivership, an internal memo circulated to staff at the firm had informed them of the decision to stop underwriting any new general insurance business and to focus on health insurance – an ultimately unsuccessful bid to stay afloat.

IRA noted that efforts to engage the management and resolve problems identified by consumers had hit a dead end.

“The company  has been facing a number of challenges particularly relating to its ability to meet its obligations and  mitigate its inherent risks, inviting the commissioner to intervene on several occasions.”

“Despite the various intervention measures taken as provided for in the Insurance Act, Resolution Insurance Company Limited has continued to slide into operational and financial difficulties,” the regulator noted.

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