Invesco Assurance Company is fighting to reverse its liquidation by the industry regulator after defaulting on payments to claims amounting to millions of shillings.
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The move follows Invesco being put under liquidation by the Insurance Regulatory Authority in February.
Justice Alfred Mabeya had in December directed Invesco to make monthly payments of Sh1 million to Kinyanjui Njuguna & Company Advocates every month from December 31, 2022 and issued stay orders for the status quo to be maintained until March 16, 2023 when further directions would be issued.
That was after 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.
So Mabeya's orders in December offered some relief but Invesco struggled to honour the payment and Njuguna Advocates moved to court to have the firm put under liquidation. They secured a court decree for the same on February 6, 2023.
As such, the Insurance Regulatory Authority in a notice 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 February 6, 2023 issued in the High Court at Nairobi in Insolvency Petition No. E155 of 2019,” Insurance Regulatory Authority chief executive Godfrey Kiptum said.
But Invesco has moved to court saying the action of the regulator was 'unconscionable, unjustifiable and a clear violation' of the High Court orders because it has deprived the firm of business opportunity and caused it revenue losses.
It its case that was certified urgent by Justice Mabeya, Invesco says it had diligently made payments to Njuguna and Company Advocates as was ordered.
"The statutory body that regulates the insurance industry (IRA) has erroneously wound up the company on a decree whose execution had been halted by this court," Invesco says.
It says the regulator invaded its business premises on February 24, 2023 and seized all its property and personal belongings of staff.
Invesco now wants the court to find IRA chief executive Kiptum found in contempt of court, saying his action brought the honourable court into disrepute, ridicule and painted the court as weak, powerless and ineffective.
But Kiptum has defended himself saying the regulator acted after conducting due diligence that confirmed the insolvency decree was authentic.
Kiptum says IRA asked Invesco to submit a clear payment plan after defaulting on the Sh1 million monthly instalments but it never responded.
"I verily believe that it is a clear act of absolute bad faith for the applicant, already in dire breach of its obligations under the Insurance Act and adjudged as such by this honourable court to seek to attribute responsibility at any level to the regulator," Kiptum said.
Invesco, in other prayers, is also seeking the court's review of the monthly payments to the law firm from Sh1 million to Sh300000 claiming that it has other creditors who it should also be paying.
The court will rule next week.
