PCF to pay Ksh.409M to Concord, Standard Assurance policyholders


PCF to pay Ksh.409M to Concord, Standard Assurance policyholders

In Summary

  • The fund which announced the first payouts from its kitty in March says it has received claims totaling to 2949 and valued at Ksh.457 million from policyholders in Concord Insurance.
  • Total claims payable to Concord policyholders will nevertheless close out at Ksh.237 million with compensation being capped at Ksh.250,000 per claimant.
  • Subsequently, the fund is expected to turn to claimants in Standard Assurance whose liability to PCF sits ar Ksh.172 million from Ksh.685 million in total claims.

Policyholders in the now defunct Concord and Standard Assurance companies are expected to split Ksh.409 million in compensation from the Policyholders Compensation Fund (PCF).

The fund which announced the first payouts from its kitty in March says it has received claims totaling to 2949 and valued at Ksh.457 million from policyholders in Concord Insurance.

Total claims payable to Concord policyholders will nevertheless close out at Ksh.237 million with compensation being capped at Ksh.250,000 per claimant.

Cocord claimants will be the first to be compensated with the PCF planning to close out payments by mid-May this year.

Subsequently, the fund is expected to turn to claimants in Standard Assurance whose liability to PCF sits ar Ksh.172 million from Ksh.685 million in total claims.

PCF Managing Trustee William Masita nevertheless states the fund is facing challenges in the participation of claimants.

“The process has been going on but the take up has been low. From Concord Insurance claimants for example, we have only had eight forms being returned so far,” he said on Wednesday.

The fund is now considering an extension in the period taken to receive claims from the policyholders from the scheduled date of April 15 citing plausible difficulties including disruptions arising from COVID-19 containment measures.

Consequential to the settlement of policyholders in Concord and Standard Assurance, the PCF is expected to trail its guns to refunding claimants in United Insurance and Blue-shield.

Total claims in the two underwriters currently under statutory management stands at Ksh3.4 billion while PCF’s liability on the claims is estimated at Ksh.2.5 billion.

The fund will nevertheless wait out for the windup of the two entities with new law changes allowing the immediate compensation of policyholders excluding the two firms which fell into statutory management before the amendments made in December last year.

The wind up of United Insurance is for instance currently blocked by ongoing litigation by shareholders.

“The main challenge is failure to have insurance firms in liquidation wound up,” added Mr. Masita.

Last month’s activation of compensation is expected to cushion policyholders who lost billions in underwriters who collapsed more than two decades ago.

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Story By Kepha Muiruri
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