Policy holders of collapsed Resolution Insurance have started receiving compensation from the Policyholders Compensation Fund (PCF).
Yesterday, the fund announced it had settled 88 claims worth Sh15 million pending audit of the entire book.
According to PCF, the insurer sank with Sh190 million belonging to of 245 policyholders.
Policyholders contribute 0.25 per cent of their premiums to the compensation fund, which their insurance companies match.
This means PCF collects a total of 0.5 per cent of all written premiums.
PCF is at the moment paying up to Sh250,000 to claimants of collapsed insurers that collapsed after 2006.
Policyholders could soon get more in compensation if an ongoing review on payments is approved.
PCF chairperson Muthoni Wangai said the amount could be raised to a maximum of Sh400,000.
"We plan to do an actuarial study in the next financial year and determine the sustainability of the maximum amount we can pay. Then we will approach the cabinet secretary," Wangai said on the sidelines of the launch of the Fund's Strategic Plan 2020-2023.
Resolution Insurance is the latest addition on the growing list of companies under statutory management among them Concord, Standard Insurance, Blueshield, United Insurance Company.
Wangai said Concord and Standard Insurance claimants combined have so far received a Sh8 million payout from PCF since settlement commenced in August 2019.
Standard Assurance collapsed in 2009 with Sh1.2 billion in unpaid claims while Concord was placed under statutory management in 2013.
The Fund’s resources grew to Sh16 billion in June this year, up from Sh15 billion in December 2020.
Wangai said the total amount available, the quantum, to settle claims is currently at Sh4 billion.
The PCF was set up to help settle claims when an insurance firm is placed under statutory management or loses its licence when it is unable to meet customer claims.
Its mandate was further enhanced to include statutory management and liquidation of insurance companies.
Standard Assurance owes creditors Sh685 million, and the Fund will settle Sh172 million while United Insurance which has been in receivership for 15 years, owes policyholders Sh1.2 billion, out of which PCF will pay Sh514 million.
Blueshield Insurance Company Limited, which was placed under receivership in September 2011, has Sh2.2 billion claims, out of which Sh2 billion will be paid out from the Fund.
