Home ECONOMY Concord Insurance Claimants to Receive KSh 467.3 Million

Concord Insurance Claimants to Receive KSh 467.3 Million

by biasharadigest

The Policyholders
Compensation Fund (PCF) will settle claims amounting to KSh 467,309,798 to
claimants of Concord Insurance, one of the underwriter that faces liquidation.

Some 1,572
policyholders of this insurance firm are to be paid by PCF, who are the
statutory managers.

Concord Insurance was placed under statutory management in 2013 after it failed to settle claims and meet other financial obligations.

The firm was underwriting private and commercial motor businesses.

At the time of going under, it had premiums of Sh95.2 million under motor private and Sh57.5 million under motor commercial.

At the end of 2011,
Concord Insurance held a 0.3 per cent market share with gross premiums of Sh181
million.

Officials at the
Insurance Regulatory Authority (IRA) attributed the firm’s financial
difficulties to huge losses in the motor underwriting business.

Concord Insurance had three branches and 67 employees at the time it was closing shop. Its business had shrunk by an estimated 61.5 per cent.

A schedule from PCF
shows that 8,150 claimants of collapsed Blue Shield Insurance Company will be
paid a total of KSh 2,334,988,330.

An estimated 690
claimants of Standard Assurance Company Limited will receive payment of KSh 685,420,416.
Standard Assurance went under in 2009 with KSh 1.2 billion in unpaid claims.

United Insurance, another PSV underwriter, collapsed in 2005 after failing to settle claims amounting to KSh2 billion.

An estimated 2,058 claimants of United Insurance Company, also under statutory management, will receive payments of KSh 909,310,000.

Insurance
Companies issue their clients (policyholders) with policies which are the basis
of claims settlements and in the event of an insolvency of the insurer, the
basis of the compensation amount payable.

Insurance
companies contribute to PCF through the payment of a levy equivalent to 0.25%
of their premium receipts.

Underwriters benefit from the increased confidence of policyholders created by the existence of the Fund.

At the moment, the fund can only compensate policy holders upto a maximum of KSh 250,000.

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