Government intervenes after SK Macharia dissolved Directline Assurance
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Insurance Regulation Authority declares the decision by SK Macharia to Dissolve Directline Assurance Null and Void
Insurance Regulation Authority declares the decision by SK Macharia to Dissolve Directline Assurance Null and Void.
The Insurance Regulatory Authority (IRA) has rejected SK Macharia’s decision to close the operations of Directline Assurance.
In a statement on Tuesday, June 11, the regulatory authority termed the move by SK Macharia to close the company and transfer assets to a third party as null and void.
IRA further dismissed the imminent transfer of Directline Assurance company’s assets to Royal Credit Limited, stating the move as impossible.
“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. The purported transfer of the assets of the insurer to any third party is therefore null and void ab initio,” read the statement in part.
IRA noted that all the policies issued by Directline Assurance remain in full force and effect and the insurer remains liable for any claims arising therefrom.
“All policyholders of the insurer may continue with their operations in accordance with their insurance contracts,” IRA stated.
The regulatory body noted that it has the sole statutory mandate to approve, suspend or cancel the operations of any insurance company in Kenya and the duty cannot be usurped by any unauthorized party.
“The Authority will take necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure the sustainability of the insurer and protection of insurance policyholders’ interests,” IRA added.
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On Monday, Macharia announced that Directline Assurance had dissolved the company’s board of directors and said the company was terminating the contracts of all its employees.
“The board of directors of Directline has been dissolved and all the assets taken over by Royal Credit Ltd. All employees have been dismissed, and Directline will no longer issue insurance services,” Macharia announced.
Macharia also announced the immediate termination of all the company’s employees and that Royal Credit Limited would take over all assets owned by Directline.
The Royal Media Services boss faulted the regulator for failing to take action on Directline’s former directors whom he accused of mismanaging Ksh7 billion belonging to the company.
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