The Insurance Regulatory Authority (IRA) has fined nine insurers Sh17.6 million for late payment of claims, failure to submit audited accounts and premium levy payment.
The nine are Invesco Insurance, Metropolitan, Kenindia, Kuscco, Kenya Alliance, Metropolitan Cannon, Takaful Insurance and Trident.
According to Insuarance Act, failure for a company to pay within the set deadlines attract a five per cent penalty on the unpaid amount.
“Where the amount of claim which is due remains unpaid on expiry of the period prescribed, or any extension thereof, a penalty equal to five percent of the unpaid amount shall forthwith become due and payable,” states the Act.
Metropolitan Cannon was fined Sh1.3 million, Takaful Insurance; Sh330,000 and Trident Sh3 million for late audit submissions while Resolution was fined Sh3.2 million and Explico Insurance; Sh510,000 were fined for failure to pay the premium levy.
Invesco Insurance was the highest fined with Sh7.9 million for delayed payment of claims followed by Metropolitan; Sh1.3 million, Kenindia; Sh1 million, Kuscco; Sh161,739 and Kenya Alliance Sh51,547.
Late payments have limited the insurance industry’s ability to grow beyond mandatory auto and health insurance.
Customers have post frustrations over insurance companies that fail to pay bill making hospitals rejected coverage for late bill payments.
Last year, Xplico insuarance recorded the highest number of client complaints in six months with 43 client complaints.
Other insuarance company that had client complaints include; Resolution which had 30 complaints, Trident had 25 complaints and Corporate had 26 client complaints.
“The Authority registered 459 complaints in second quarter of 2021. General insurance business accounted for 75 per cent of the complaints whereas 25 per cent were made against long term insurers,” read IRA report.
“Over the period 104 (30 per cent) complaints against general insurers were resolved while 59 (51 per cent) complaints against long term insurers were resolved.”
On insurance fraud cases, sixteen cases were reported to the Insurance Fraud Investigation Unit (IFIU).
The nature of cases included; fraudulent motor accident (Injury) claims which were 3, fraudulent medical claims (2), premium misappropriation (2), suspected client financial fraud (2), theft/stealing by agents (1), double issuance of insurance certificate (1), forgery of insurance certificate (1), complaint against advocate (1), loss of insurance certificate (1), forgery of motor vehicle sticker (1) and obtaining money by false pretence (1).
