A commercial disputes court has appointed Diana Nduku Mumo as an interim liquidator of financially distressed Xplico Insurance Company to oversee its winding-up.
Ms Mumo has been tasked with preserving the firm's assets, which will be used to pay debts owed to all creditors, including policyholders.
She was appointed by Justice Moses Ado from a list of three licenced insolvency practitioners presented to the court by the Insurance Regulatory Authority (IRA) chief executive officer, Godfrey Kimaiyo Kiptum.
Others on the list were Etemesi Elfas Oniang’o and Kolluri Venkata Subbaraya Kama Sastry.
The appointment of Ms Mumo comes after the statutory management period of the insurer by the Policyholders Compensation Fund (PCF) lapsed on March 7, 2025.
According to the court order, Ms Mumo has been tasked with tracing, taking possession of, collecting, recovering, protecting and preserving the value of the assets of the insurer pending the determination of the liquidation petition.
The petition stems from the failure of Xplico to pay the financial claims of its policyholders and creditors.
The judge found that the evidence adduced by IRA showed that Xplico cannot meet its financial obligations.
"From the evidence, it is clear that the company cannot meet its financial obligations. A financial statement that was produced attests to that. I find and hold that the evidence warrants the appointment of an interim liquidator pending the determination of the liquidation petition. The liquidator shall be responsible for the preservation of the assets of the company, which will be used for the repayment of the debts owed to all the creditors," said the judge.
Xplico Insurance began experiencing challenges in 2015 in complying with various mandatory provisions of the Insurance Act, including capital adequacy requirements. It subsequently undertook various capital-raising initiatives, all of which were unsuccessful.
Mr Kiptum told the court that the IRA made several attempts between 2016 and 2023 to ensure the company survived but all attempts were futile.
Following the failure, the company was in December 2023 placed under statutory management for a period of one year.
PCF was appointed as the statutory manager and its mandate ended in December 2024, but was extended to March 7, 2025 to allow creditors to claim their dues.
In its report, the PCF stated that the insurer was insolvent and that its liquidity was inadequate to meet its statutory, financial and legal obligations as required by the Insurance Act, and therefore recommended liquidation
The recommendations were considered by the IRA’s board at its special meeting on November 27, 2024, where it was approved that an application be made to court for the liquidation of Xplico.
Apart from the insolvency petition, Xplico has been facing a shrinking market share after matatu operators abandoned it.
