The Insurance Regulatory Authority (IRA) has placed Invesco Assurance Company under Statutory Management.
IRA Commissioner of Insurance Godfrey Kiptum in a notice dated 14th August 2024 made the announcement saying that the placement takes effect immediately.
Further, the Commissioner said that the Authority has appointed a new Statutory Manager for Invesco Assurance.
“Insurance Regulatory Authority (IRA) has with effect from 14th August 2024 placed Invesco Assurance Company Limited under Statutory Management as per Section 67C(2)(i) of the Insurance Act,” reads the statement in part.
“The Authority has appointed the Policyholders Compensation Fund (PCF) as the Statutory Manager for Invesco Assurance Company Limited (under statutory management).”
When an insurance company is placed under statutory management, it means that the company is being temporarily overseen and managed by a government-appointed official or body due to financial or operational difficulties.
This intervention is typically intended to stabilize the company, protect policyholders, and ensure that the company can meet its obligations.
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IRA places Insurance Company under statutory management
Following the placement, IRA warned that Invesco Assurance Company Limited (under statutory management) is not authorized to enter any new insurance contracts from 14th August 2024.
The insurer’s existing Policyholders were also advised to immediately seek alternative covers from other licensed insurers to ensure that there is no unnecessary exposure.
Further, IRA noted that the Policyholders Compensation Fund will compensate the affected claimants as provided for under the Insurance Act, Cap 487 Laws of Kenya.
Statutory management is often a step taken when an insurance company is facing severe financial issues, such as insolvency or the inability to pay claims, and regular management is deemed insufficient to resolve the situation.
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The statutory manager will take control of the company’s operations, financial management, and decision-making processes, working towards a resolution that might involve restructuring, recapitalization, or, in extreme cases, liquidation.
The goal of statutory management is to safeguard the interests of policyholders and maintain the stability of the insurance market while finding a solution to the company’s difficulties.
Invesco Assurance Struggles
Notably, the IRA’s decision extends a streak of struggles Invesco Assurance Company has faced for several years now.
These include two instances when the insurer has been placed under liquidation, and others when it has been fined for some offence.
Last December, the insurer had to rush to the High Court after the IRA stopped it from issuing new covers, following petitions submitted before the IRA by two claimants.
The IRA’s liquidation order followed a dire situation whereby at the end of September 2023, Invesco topped the list of insurers with the highest number of unpaid claims.
In addition, the insurer had 3.85 million outstanding liability claims, up from 3.69 claims that were outstanding as of the end of 2022.
The liability claims meant that even after insured customers approached the insurer to pay claims following losses emanating from an insured risk, Invesco had not settled.
By the end of March 2024, IRA data shows that Invesco’s outstanding claims were 3.74 million, down from 3.88 million at the start of January.
Invesco Assurance Company Limited, a popular matatu insurer, has been struggling since 2019, clashing with IRA over failure to remit its financial statements.
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