The Fall of Resolution Insurance

With its blue and red logo, Resolution is easily one of the most recognizable insurers in the country. The firm is one of several ventures controlled by maverick entrepreneur Peter Nduati. Resolution’s Health Insurance division, in particular, made its presence felt in the market.

Around a week ago, photos started circulating on social media of office equipment at Resolution Insurance being carted away by auctioneers. A few days ago, an internal memo circulated to staff seen by Business Today informed them of the management’s decision to stop underwriting any new general insurance business – urging for focus on the health insurance business to stabilize the ship.

On Tuesday, April 5, the Insurance Regulatory Authority (IRA) confirmed the worst as it announced that the firm had entered receivership due to failure to meet capital adequacy requirements.

It has been unable to pay customer claims or honor obligations to creditors. “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 IRA noted in a statement.

The Policy Holders Compensation Fund, appointed statutory manager for Resolution Health, on Wednesday, April 6 also invoked a 12-month moratorium on all payments related to Resolution Insurance.

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PCF noted that the move was intended to protect policy holders against claims or orders that would ordinarily have been paid by the company.

“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,” the statement from PCF read in part.

Problems at Resolution have been simmering for a while now. In 2021, it became apparent that something was amiss as it recorded the second-highest number of consumer complaints filed with the Insurance Regulatory Authority in the six months to June 2021. Resolution registered 30 complaints over the  period, trailing Xplico Insurance who posted 43 complaints.

Many of the firm’s customers had complained that claims were not being settled. They claimed their contracts were being breached. A number of hospitals also dropped Resolution Health as an accredited insurer. Efforts by the management in consultation with IRA to fix things ultimately proved unsuccessful.

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