Court orders liquidation of Blueshield Insurance
![Blue Shield Insurance Company building in Upper Hill, Nairobi.](/resource/image/4671970/landscape_ratio2x1/320/160/e943ffa20795292a78ea48dddabefb7b/ew/blueshield.jpg)
Blue Shield Insurance Company building in Upper Hill, Nairobi.
Blueshield Insurance Company will now be liquidated after a judge agreed with the Insurance Regulatory Authority (IRA) that the underwriter cannot be resuscitated.
High Court Judge Alfred Mabeya spelt the death knell of the underwriter saying there was no evidence that shareholders were willing to inject any capital in the company to make its capital ratios compliant and the verified liabilities, in excess of Sh800 million still stare at the firm.
“A liquidation order is hereby made against Blueshield Insurance Company,” said Justice Mabeya. Liquidation (or winding up) is the process by which a company's existence is terminated by disposing of its assets to settle debts. Any monies remaining after all debts, expenses, and costs have been paid off are distributed among the company's shareholders.
An application by the commissioner of IRA, Mr Godfrey Kiptum, had been opposed by Ms Beth Muigai and Ms Jean Ngengi arguing that there were still hope of reviving the company arguing that liquidation was draconian.
Blueshield was incorporated in December 4, 1982, and all was well until September 2011 when it was placed under receivership and Eliud Muchoki appointed the statutory manager, who served from September 15, 2011 to July 4, 2014. Mr Kiptum informed the court that the company could not fulfil the reasonable expectations of policyholders and its shareholding and board structure were not in compliance with the Insurance Act.
He said the insurer had issues with compliance with respect to non-remittance of contributions to the Policy Holder’s Compensation Fund, non-payment of premium levies as well as to the Insurance Training and Education Trust.
And despite being placed under statutory management, the company was unable to fulfil the reasonable expectations of the policyholders.
Mr Kiptum added that the company did not have the required capital to support its day-to-day trading operations.
He said the verified liabilities were more than Sh855 million, which included court judgements, executed discharge vouchers, and service provider vouchers.