NAIROBI, May 22 – A plan announced by the Matatu Owners Association (MOA) on Thursday said setting up its own insurance company could be just the breath of fresh air needed for matatu owners, who struggle to provide indemnity for their vehicles.
With owners constantly losing millions of shillings through the closure of the companies that provide cover, MOA Chairman Simon Kimutai said they would establish their own insurance company to cushion members from frequent exploitation.
Kimutai said: “We are going ahead to form a company that will have a pool and will not have vested interests by outsiders; it will be those who have invested in it. It will be a company that belongs to them so they will be able to guard it and there is no mismanagement.”
Individuals and companies have lost billions of shillings as insurance companies close business.
Stallion, Lakestar, Liberty, Access and United Insurance Companies are among several insurance and brokerage firms which have had their operations closed in the last decade.
In January 2008, Invesco Insurance Company was placed under statutory management amid allegations of fraud.
Kimutai revealed that the MOA would be moving to court over Invesco’s closure and institute charges against the Attorney General and the Commissioner of Insurance for failing in their mandate.
“Directors of this company are free despite the fact they could have mismanaged the company. We are entirely blaming the regulator because this is the person who is supposed to be checking balances,” he said.
This unfortunate strain of mismanaged insurance companies has been widely attributed to invalid claims and shrewd businessmen accused of looting the businesses.
It appears the enhancement of the Office of Commissioner of Insurance to a regular Insurance Regulation Authority did not effectively alter the unethical line-up in the insurance sector.
The Authority is in the process of rolling out absolute guidelines on insurance business conduct with the help of industry players, aimed at controlling fraud in medical and motor accident claims – the areas most hit by fraud.
The association has in the meantime formed a bus company in a move to consolidate resources and overcome perennial problems.
The company, which is operating as a franchise with members offering their vehicles for management, currently has four buses. The buses will have a common branding, ticketing system and operate on specific routes.