The Insurance Regulatory Authority (IRA) has distanced itself from approval of the planned acquisition of Saham Assurance Kenya Limited by Mauritius Union Assurance company (MUA),throwing the deal into jeopardy.
The regulator yesterday said it has not approved the deal, which involves MUA's Kenyan subsidiary MUA Insurance (Kenya) Limited.
Last week Monday,(January 13), Saham informed its partners of acquisition plans, which would see the firm enter into a share purchase agreement with MUA for the acquisition of 100 per cent of Saham.
“Having met with the MUA team,I am confident in their approach of delivering innovation, enhanced IT capabilities , professionalism and customer-centric products into our Kenyan market,” managing director Lydia Kibaara had said.
While a cautionary announcement was made by MUA Limited in Mauritius, in compliance with the listing rules of the Stock Exchange of Mauritius, the Kenyan based entity breached the regulations, which includes seeking regulatory approval and informing the public of its intentions.
“Please note that the transaction has not been approved by the Insurance Regulatory Authority as provided for under the insurance act,” CEO Godfrey Kiptum said in a public notice yesterday.
According to IRA, the announcement “may have been misleading to the public” since there was no indication that it was subject to various regulatory approvals as required under the Insurance Act.
Sources within the authority yesterday told the Star the Principal Officer of the insurer together with the chairman were summoned by IRA to explain the anomaly.
“They admitted that the Kenyan announcement was by error,” the senor manager said, noting that section 164 of the Insurance Act prohibits the publication of any misleading information.
Saham Assurance Kenya Limited has only informally informed IRA of their intention, with the agreement that they will lodge the formal application at "the opportune time."
The acquisition of Saham comes after Sanlam Group decided to drop the Saham business over license issues.
Sanlam took over Morocco’s Saham Finances in October 2018 after acquiring 53.37 per cent equity, pushing its shareholding to 90 per cent.
The two however had similar business licenses which saw IRA order a merger of their businesses.
“The authority directed Sanlam Insurance Group to reorganize their businesses after acquiring Saham Assurance Company Limited to ensure that they do not have multiple licences for the same business,” IRA said yesterday.
Consequently, Sanlam decided to dispose off Saham Assurance Kenya Limited instead of merging the businesses.
MUA which had initially acquired Phoenix Assurance has since expressed interest in acquiring Saham.
