Invesco Assurance Company has become the third insurance firm to sink into liquidation after failing to pay claims running into millions of shillings.
The cash crisis at the insurer, a major underwriter in the matatu industry, saw the company pay only 48,207 claims in the last quarter of 2022, against the reported outstanding 3,692,353 claims.
This was a payment ratio of 1.2 per cent, the lowest of any insurer in the country.
The crisis has attracted the interest of the industry regulator who directed the insurer to immediately stop entering into new insurance contracts.
“Invesco Assurance Company has been placed under liquidation through a decree of the court dated 6th February 2023 issued in the High Court at Nairobi in Insolvency Petition No. E155 of 2019,” said Godfrey Kiptum, the Insurance Regulatory Authority (IRA) commissioner of insurance and CEO.
The High Court has further appointed the official receiver as the provisional liquidator.
Invesco joins Concord Insurance Company Limited and Standard Assurance Kenya Limited in liquidation.
The company has been struggling since 2019, clashing with IRA over failure to remit its financial statements
According to IRA, 2018 is the last time Invesco’s financial filings were in order, where it collected Sh1.5 billion in premiums and controlled a market share of 1.2 per cent of general insurance premiums.
“Following this court decree, Invesco Assurance Company is stopped from issuing insurance policies and therefore not authorised to enter into any new contracts of insurance,” Kiptum said.
Invesco was among the firms hit with fines for various breaches, including late payment of claims and failure to submit audited accounts in quarter three of 2022.
It received the highest fine of Sh24.94 million to stay in IRA’s black book over missed deadlines of submitting audited books.
Kinyanjui & Company Advocates had in July 2019 filed an Insolvency Petition against Invesco seeking, among other orders, that the insurer be liquidated to settle debts of more than Sh29 million.
High Court has been deferring its final orders in the judgment on the application of the insurer, but little progress was realised in paying the debts.
The Policyholders Compensation Fund (PCF) will compensate the affected claimants as provided in section 179 of the Insurance Act.
PCF’s primary purpose is to protect policyholders of insolvent insurers by compensating them for unsettled claims.
The maximum compensation payable by the Fund on any one claim lodged by a claimant is Sh250,000.
IRA has since 2019 rejected the company’s financial performance reports, citing “data inconsistency and non-compliance with submission requirements”.
