The Insurance Regulatory Authority (IRA) has revoked the closure of Directline Assurance Company Limited by Dr. Samuel K. Macharia's chairman.
In a press statement to newsrooms, IRA Commissioner of Insurance, and Chief Executive Officer Godfrey Kiptum, the Authority has noted Dr. Samuel K. Macharia's communication through Royal Credit Limited regarding the operations of Directline Assurance Company Limited.
Kiptum declared the purported transfer of Directline Assurance Company Limited's assets to a third party null and void.
“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,” said Kiptum.
Further, Kiptum said all policies Directline Assurance Company Limited issued remain in full force and effect and stressed that the insurer remains liable for any claims arising from that place.
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“All policyholders of the insurer may continue with their operations in accordance with their insurance contracts.”
Similarly, the CEO said the Authority has the sole statutory mandate to approve, suspend, and cancel the operations of any insurance company in Kenya, adding that the mandate cannot be usurped by any unauthorized party.
Kiptum said the Authority has placed the insurer under heightened surveillance and will take necessary steps, under the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure the insurer's sustainability and protection of insurance policyholders’ interests.
This comes after S.K. Macharia issued a terse statement announcing that all employees of Directline had been let go.
He also announced that the Board of Directors would be dissolved immediately and that Royal Credit Limited would acquire all Directline assets.
Macharia attributed Directline Assurance Company's liquidation to the Insurance Regulatory Authority's (IRA) decision to freeze its bank accounts.
Macharia also accused IRA of mismanaging Ksh7 billion in funds and blamed the organization for not taking action to remove its former directors.
After reaching the controversial conclusion, the company announced that all insurance services will be immediately discontinued.
