Policyholders Compensation Fund (PCF) has paid out more than Sh100 million in claims to policyholders of collapsed insurers in the last two years, a top official said.

Deberious Sikuku, PCF director representing the general public disclosed they have compensated insurers so as to bring certainty to policyholders as to what would happen to them in the event their insurer firms become insolvent.

“We want to enhance confidence in the insurance industry through timely compensation of policyholders of a company placed under a statutory manager or whose license has been cancelled, or declared insolvent,’’ he said in Kisumu.

Currently, PCF is engaging with members of the public and civil servants in the county, which is the fourth devolved unit where PCF is sensitising the people.

Sikuku said the current sensitisation move is part of the strategic plan to increase the level of awareness of the State corporation’s mandate and functions as well calling members of the public to come forward and lodge their claims for insurance compensation. He said the Fund is engaging with its stakeholders since the launch of PCF Mtaani sensitisation engagements forum planned for, all the 47 counties. The next sensitisation engagements by PCF will be in Mombasa County, after Kisumu.

Sikuku disclosed that the status of compensation by the Fund for insurers under Statutory Management and Liquidation as at June 30, 2023, was good. The beneficiary insurance firms that went under are Resolution Insurance Company Ltd with about 724 claimants so far compensated with Sh82.21 million and Concord Insurance Company Ltd where 45 claimants have been compensated with Sh9.02 million.
The other one is Standard Assurance Company Ltd where nine claimants have so far been compensated Sh1.95 million.

The maximum amount for compensation is currently gazetted as Sh250,000 per claim. The Fund launched compensation for policyholders of collapsed insurers on March 10, 2021 following an amendment to the Insurance Act in 2019.

Prior to the amendment, compensation for policyholders and claimants only commenced upon a collapsed insurer being fully wound up in court.

Due to delays in the winding up process for insurers in court, policyholders were unable to lodge claims for compensation and were also unable to receive any reprieve from compensation for their claims with the collapsed insurers.

But since PCF commenced operations on January 1, 2005, the policy insurers now have all the reason to insure their lives and property because of assured indemnity by PCF, where the maximum amount for is gazetted at Sh250,000 per claim. The Fund spearheaded the amendment of the Insurance Act to replace the requirement for winding up with a requirement for insurers to be placed under statutory management or have their licenses revoked for compensation to commence.

Ultimately, the sensitisation engagement forums, which at the moment has set up camp in Kisumu County seek to enhance the publics’ understanding and knowledge about PCF which provides a last-resort protection scheme for policyholders and claimants when insurance companies collapse as well as give confidence to insurance policyholders and claimants.