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Over 25,000 clients of collapsed insurer yet to seek refunds

BUSINESS
By By Jackson Okoth | March 21st 2014

By Jackson  Okoth

The Liquidation process for the State-owned Kenya National Assurance Company (KNAC) is on the homestretch. This is happening even as more than 25,000 policy holders are yet to make their claims from the collapsed insurance firm.

In a public notice yesterday, the KNAC management stated if those yet to make claims to the Life fund do not do so within 60 days, all unpaid amounts would be transferred to the newly established Unclaimed Financial Assets Authority.

Apart from KNAC, there are seven other troubled insurance firms – most of them still under statutory management.  Concord is the latest insurance firm to have the terms of its statutory manager extended, leaving its policyholders in limbo.

According to Insurance Regulatory Authority’s Head of Corporate Communications, Noella Mutanda, the notice is a reminder for those who have not come forward to make their claims to do so.  “We are no longer involved in the liquidation process which is now a court matter,” she added.

As at March 20, 2014 a total of Sh 3.9 billion has been settled. Sh 405 million is what KNAC is passing on to the Unclaimed Assets Authority by July- 2014 this. The 25,000 holders are mostly those with small policy holders of between Sh 20,000 and Sh 30,000. Out of 155,000 files,  some 25,000 files are still outstanding. In the notice, KNAC says that it will send to the Unclaimed Financial Assets Authority any funds held under life or endowment insurance policy or annuity that has matured and remained unclaimed for more than two years after benefits became due.

KNAC collapsed more than 15 years ago and its operations were taken over by an official receiver. KNAC (2001) Limited came into the picture to run the life fund and pay off policies that had either matured or had acquired some surrender value.

KNAC collapsed and was placed under statutory management in 1996. While its demise sent shockwaves in the local insurance industry, the sector has since recovered.

“The ground has shifted substantially and the industry recovered fully. We have new frontiers and products with firms doing a turnover of Sh12 billion compared to less than Sh1 billion for KNAC when it went under,” said Tom Gichuhi, Association of Kenya Insurers chief executive.

KNAC has been disposing of property under its life fund to pay off policyholders’ claims. Part of its property that has been disposed of includes Corner House (Sh700.7m), Bima House (Sh560m), Bima Tower, Mombasa (Sh256m) KNAC Tower, Kisumu (Sh224m), Protection House (Sh220m) and Town House, Nairobi (Sh210m).

Others are Salama House (Sh127.8 m) and Bamburi Plot (Sh43.9m), Eldoret Complex (Sh50m), Tiwi Plot, Mombasa (Sh16m), Managers House, Mombasa Sh7.5 m, Managers House, Kisumu (Sh4.8m), Managers House, Nakuru (Sh2.650m), Managers House, Nyeri (Sh3.2m) and Ex-Ohawa Plot (Sh1.35m).

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