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Regulator responds to S.K. Macharia's closure of Directline, gives way forward

The Insurance Regulatory Authority gives the way forward for thousands affected by S.K. Macharia's abrupt decision to close Directline Assurance

Billionaire S. K. Macharia
  • IRA confirms Directline Assurance's full operational status
  • Dr. S.K. Macharia's claims of closure and termination are dismissed by IRA
  • Directline Assurance remains under heightened surveillance by IRA

The Insurance Regulatory Authority (IRA) has officially responded to recent claims made by S. K. Macharia, Chairman of Royal Credit Limited, regarding the operations of Directline Assurance Company Limited.

In a detailed press release on June 11, the IRA has unequivocally stated that Directline Assurance continues its operations fully licensed and approved by the authority.

Dr. Macharia had earlier announced the closure of Directline Assurance and the termination of all its employees, attributing this drastic measure to the Insurance Regulatory Authority’s decision to shut down the company's bank accounts.

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He cited the misappropriation of over Sh7 billion by former directors as a primary reason for the downfall, alleging insufficient action by the IRA on this matter.

However, the IRA's statement firmly dismisses these claims as "null and devoid of any legal effect."

The regulatory body clarified that Directline Assurance remains fully operational, and all policies issued by the company are still valid and enforceable.

The authority added that policyholders can continue their insurance contracts without interruption, ensuring that their claims and operations remain unaffected.

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IRA emphasised its exclusive statutory mandate to approve, suspend, or cancel the operations of any insurance company in Kenya, a power that cannot be overridden by any unauthorised entity.

Consequently, any purported transfer of Directline Assurance’s assets to the Royal Credit Company is declared invalid from the outset.

Furthermore, the IRA has placed Directline Assurance under heightened surveillance to ensure the company's sustainability and the protection of policyholders' interests.

This action aligns with the IRA’s commitment to maintaining industry stability and safeguarding market confidence as outlined under the Insurance Act, CAP 487 Laws of Kenya.

The Commissioner of Insurance and CEO of IRA, Godfrey Kiptum, reassured stakeholders that the authority will take all necessary measures to uphold the integrity of the insurance sector and protect consumers' rights.

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This development highlights the IRA’s vigilant regulatory role and underscores the importance of adhering to statutory mandates in the insurance industry.

The authority’s swift response aims to alleviate concerns among policyholders and stakeholders, reinforcing that Directline Assurance remains a reliable entity within Kenya’s insurance landscape.

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