IRA signs deal to curb advocates withholding insurance payouts
Insurance Regulatory Authority (IRA) CEO, Godfrey Kiptum.
The insurance regulator will intervene in cases where advocates are accused of withholding insurance compensations, amid concerns that insurers have been reluctant to cooperate on complaints.
This follows a Memorandum of Understanding (MoU) that the Insurance Regulatory Authority entered with the Advocates Complaints Commission (ACC) on Monday to protect Kenyans by easing settlement of accident claims.
“The MoU formalises the existing collaborative efforts between IRA and ACC to address concerns related to increased complaints against advocates, particularly in the settlement of insurance compensation claims,” the IRA said in a statement announcing the agreement.
In the year to June 2023, the insurance sector contributed 60 percent of the abuse of buyer power cases investigated by the Competition Authority of Kenya (CAK), with 68 out of the 114 cases. Majority of the cases were on delayed payments.
The IRA noted that while complaints about advocates withholding insurance claim compensations continue to grow, insurers have been reluctant to provide the ACC--the statutory body mandated to enquire into complaints of professional misconduct against advocates and law firms-- with information on settlement of claims.
“A significant number of complaints lodged with ACC involve withholding of compensation by Advocates from settled insurance claims. ACC has faced challenges in obtaining information regarding the status of settlement of claims from insurance companies, thus hindering its ability to effectively investigate and resolve these complaints,” the regulator stated.
Insurance integrity
Commissioner of Insurance, Godfrey Kiptum, said the partnership would boost the integrity of the insurance industry.
“This partnership is a critical step in our ongoing efforts to ensure that the insurance industry operates with the highest levels of integrity and accountability. This will be cemented by working closely with the Commission, and we are committed to addressing any gaps that allow for the exploitation of policyholders and ensuring that justice is served,” Mr Kiptum said.
Through the partnership, IRA committed to ensure that insurance firms cooperate with the ACC whenever it requires such information, to strengthen transparency and fair treatment of insurance policyholders and claimants.
The regulator said that where insurers are uncooperative, ACC will be allowed to formally request IRA’s intervention.
“Additionally, the MoU establishes a framework for regular information exchange, capacity building and collaborative policy development to bolster consumer protection,” it said.
ACC Chairman, Moses Cheboi, said the partnership would particularly help the commission investigate complaints touching on remittance of insurance compensation by advocates.
“This MoU provides us with the necessary tools and support to effectively investigate and resolve complaints, particularly those involving the remittance of insurance compensation by advocates. We look forward to a fruitful collaboration that will ultimately benefit the public,” he said.
