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MOTORISTS:  Motorists heaved a sign of relief after the High Court suspended the move by insurance companies to increase premiums by up to 50 per cent.

In the ruling made yesterday, Justice James Makau also stopped insurance firms from excluding motor vehicles that are more than 12 years old, or with a value of Sh600,000 and below, from the comprehensive cover.

“I have considered the petitioner’s grounds in support of the application and oral submissions by both parties and upon careful evaluation of the same, I find that the petitioner has demonstrated a prima facie case with a likelihood of success,” ruled the Judge.

Justice Makau said that declining to grant the interim orders would prejudice Kenya Human Rights Commission (KHRC) as the petitioner in the case where the Insurance Regulatory Authority (IRA) and Association of Kenya Insurers (AKI) have been named as respondents. 

Makau further allowed the Consumers Federation of Kenya (Cofek) to be enjoined in the suit and directed them to file and serve their responses within 21 days.

The human rights commission sued the two entities following their attempt to increase insurance premiums for vehicles and exclusion of specific categories from the motor vehicle comprehensive cover.

Business partners

Insurance firms had notified their customers and business partners of higher insurance rates beginning January 1.

KHRC moved to court to challenge the move accusing the Regulatory Authority of violating the fiduciary duty it owes to policyholders and the public in general for allowing insurance companies to unjustifiably increase premiums up to 50 per cent with no public participation.

Through its Executive Director Davis Malombe, KHRC said the mandatory nature of motor vehicle insurance makes the said actions of insurance companies discriminatory, unjustified and illegal.

“This is discriminatory since the said vehicles are still in use and without proper insurance; the said vehicles are a risk to the safety of the public and other road users,” argued KHRC. The case will now be mentioned on February 14 to confirm compliance.