KNAC to pay claims by December

November 24, 2008
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, NAIROBI, November 24 – Life insurance policyholders with the defunct Kenya National Assurance Company are now being invited to lodge their claims so that their benefits can be paid.

Kenya National Assurance Company (2001) Limited Chairman Mr Alexander Kaminchia told a media briefing on Monday that they had launched a three-week campaign to get about 30,000 policyholders, whose insurance covers had matured to collect their payments before the end of this year.

“We call upon all (life) policyholders who have not completed and returned their discharge forms to do so without further delay to facilitate the disbursement of their benefits,” he said adding that the customers could contact the firm at its offices at Corner House on Kimathi Street in Nairobi.

The Chairman also explained that about 1,000 policies which had not matured would be transferred to another insurance company which would have to be approved by the Acting Finance Minister  John Michuki.

Since it commenced the payment of life policyholders’ benefits in 2003, the company has used many methods such as registered and unregistered mails. They have also used newspapers, radio and television announcements to reach about 50,000 clients.

Mr Kaminchia however complained that their efforts had been hampered by the change of address by some clients which meant that they failed to get the correspondence.

The new company was incorporated in 2001 under the provisions of the Companies Act as a Life Assurance Company to take over assets and actuarial liabilities amounting to Sh3.9 billion of the Closed Life Fund of the former Kenya National Assurance Company.

“The current mandate of the board is to run-off the Life Fund by disposing off all its assets and settling all its liabilities by December 31 2008,” the chairman explained.  The general business of the company is still being liquidated by the official receiver.

Mr Kaminchia said they had paid out Sh3.2 billion worth of claims which they inherited when their parent company was placed under receivership.

He however explained that they could end up paying more than the Sh3.9 billion quoted by the High Court as some policies were not disclosed before they took over the company.

He said they had managed to dispose of the assets of the Life Fund of the former company and they would use part of Sh450 million raised from the sale to pay for the benefits.

Also present at the press conference was Insurance Regulatory Authority (IRA) Chief Executive Officer Mr Sammy Makove who lauded the move to compensate the clients as a positive step towards revamping the image of the insurance industry.

He urged other players to emulate the firm so as to restore the confidence in the sector and increase the number of people who have life covers.

It is estimated that only 500,000 people or about 1.4 percent of the Kenyan population have life insurance.

Mr Makove however disclosed that IRA was carrying out various initiatives such as the enhancement of insurance distribution channels to encourage more people to buy insurance premiums.

His remarks came a few days after Michuki directed that shareholders of insurance companies with over 10 percent equity should not be involved in their management to reduce conflict of interest.

Mr Makove also added that directors of insurance companies would be required to go through training on corporate governance to impact the skills and knowledge of proper insurance principles.

“No insurance firm is going to be licensed unless it is able to produce evidence that all directors of the board have undergone training on good governance in the Centre of Corporate Governance,” he said adding that this would in future be a requirement for all employees of the firms.

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