The Insurance Regulatory Authority has announced that Directline Assurance is still operational despite the firm saying it is closing down.
IRA Chief Executive Officer Godfrey Kiptum on Tuesday said the Authority has taken note of communication released by S. K. Macharia through Royal Credit Limited regarding operations of Directline Assurance Company Limited (the insurer).
Macharia in his communique said the Insurance firm is ceasing operations, terminating contracts of all employees as well as dissolving the board.
"The purported actions are null and devoid of any legal effect and as such the insurer continues in full operation as licenced and approved by the Authority," Kiptim said.
" The purported transfer of the assets of the insurer to any third party is therefore null and void ab initio."
He said all policies issued by Directline Assurance Company Limited remain in full force and effect.
He said the insurer remains liable for any claims arising therefrom.
"All policyholders of the insurer may continue with their operations in accordance with their insurance contracts," he said.
Kiptum said the Authority has the sole statutory mandate to approve, suspend or cancel the operations of any insurance company in Kenya.
Kiptum said the said duty cannot be usurped by any unauthorised party.
He said the insurer has been placed under heightened surveillance by the Authority.
"The Authority will take necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure the sustainability of the insurer and protection of insurance policyholders’ interests," he said.
