The reviewing of the motor third party liability law by the Insurance Regulatory Authority (IRA) is a crucial moment for the National Treasury, in whom the Motor Third Party Liability (Cap 405) and Insurance Regulatory Authority dockets are anchored, to review both the statute and the IRA’s mandate.
There is also an urgent need to review the Insurance Act (Cap 487), especially the management of underwriters, the claims compensation and insurance premiums, in particular the Road Transport Service Operations.
Investing in and management of underwriting firms are different animals and should not be a wheeler-dealer perception of quacks as has happened of late.
Also, third party liability premiums are a great concern to motorists, including in the public service vehicle (PSV) sector.
The rates should be negotiated between the consumers, actuarists and underwriters.
Matatu Owners Association (MOA) did that in 2001 with the Association of Kenya Insurers (AKI) and its members, settling on a 20 per cent reduction from Sh105,000 to the current Sh84,400.
The rates must be affordable and payable on an agreed terms.
The IRA, whose mandate is oversight, should ask the Directorate of Criminal Investigations (DCI) to investigate the directors and managers of the collapsed firms and those seeking to wind up for mismanagement with the aim of finding them culpable of abuse of office and misappropriation of the public’s money.
Hundreds of thousands of Kenyans are languishing in abject poverty because these insurers divested vast sums in premiums and took the money.
The IRA board of directors should be overhauled to accommodate all stakeholders.
Over the past three decades, seven companies have gone under, right under the nose of IRA: Stallion Insurance, Liberty Assurance, Standard Assurance, United Insurance, Blue Shield Assurance, Access Assurance and Invesco Assurance.
Amaco Limited has petitioned for liquidation — No. E163 of 2019 — to be heard this January 30, and Kenya Gazette Legal Notice 12216 of December 16, 2019.
The firms collapsed with many unpaid claims worth hundreds of millions of shillings.
The Sh3 million limit for claim payment by insurers, over and above which is left to the PSV owner, should be revisited as it was not subjected to public participation.
The State should reconstitute the Kenya Motor Pool as an inclusive motor liability redress control centre under a well-crafted policy different from the collapsed 1985-1989 one.
For KMP to end the insurance claim chaos, commuter fares should be negotiated by the parties: IRA, AKI, the Consumers Federation of Kenya (Cofek) and the Federation of Public Transport Sector.
We also need a claims liability model that is moderated, transparent and efficient, in line with the Competition Authority of Kenya mandate.
The Treasury, through the IRA, should reinstate the two-cheque payment system to save “Wanjiku” from thieving lawyers and structured compensation, a predetermined figure to be paid to the victim depending on the body organ severed, amended in Cap 405.
Lastly, make the travel manifest mandatory for inter-city (long-distance) PSVs, as it is for airlines, so as to establish the authenticity of passengers.